GTA CONTAINERS, INC. v. USA
Filing
110
PUBLISHED OPINION - Originally issued under seal on Feb. 8, 2012. Denying defendant's motion to dismiss; granting plaintiff's cross-motion for judgment on the administrative record and denying defendant's and intervenor's cross-motions; declaring award to intervenor unlawful and enjoining performance. Signed by Judge Christine O.C. Miller. (smg) Copy to parties.
In the United States Court of Federal Claims
No. 11-606C
(Filed February 22, 2012) 1/
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GTA CONTAINERS, INC.,
Plaintiff,
v.
THE UNITED STATES,
Defendant,
and
J.G.B. ENTERPRISES, INC.,
Defendant-Intervenor.
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Post-award bid protest; 28
U.S.C. § 1491(b)(1) (2006);
material misrepresentation; 28
U.S.C. § 1491(b)(3), interests of
national defense and national
security.
Scott E. Pickens, Washington, DC, for plaintiff. Karen A. McGee, Barnes &
Thornburg LLP, of counsel.
Michael S. Macko, Washington, DC, with whom was Assistant Attorney General
Tony West, for defendant. Elliot S. Avidan, U.S. Marine Corps, Quantico, VA, of counsel.
Joseph A. Camardo, Jr., Auburn, NY, for defendant-intervenor. Kevin M. Cox,
Camardo Law Firm, P.C., of counsel.
1/ This opinion was originally filed under seal on February 8, 2012. The parties were
requested to notify the court of any redactions. Defendant did not request any redactions, and
plaintiff only requested three, which have been implemented. Intervenor’s requested
redactions, although extensive, have been implemented.
MEMORANDUM OPINION AND ORDER REPLACING ORDER ON
PERMANENT INJUNCTION AND ORDER FOR ENTRY OF JUDGMENT
ENTERED ON JANUARY 26, 2012, REISSUED FOR PUBLICATION ON
FEBRUARY 6, 2012
MILLER, Judge.
This post-award bid protest is before the court after argument on the parties’ crossmotions for judgment on the administrative record. The issues presented have been refined
up to the last minute because the military has twice taken corrective action to delimit the
scope of the contract under which it is placing an order for emergency procurement. The
Government’s evolved position is that the military canceled the solicitation and that the
procurement vehicle is an emergency order to fill military exigencies without which troops
would be imperiled and has nothing to do with the defunct contract. The protester insists that
the awardee is in the position of filling an emergency order only because the military
originally awarded the contract based on a material misrepresentation. The awardeeintervenor maintains that the protester lacks standing or would not be prejudiced by an award
because the military questioned the protester’s ability to perform the scope of work under the
solicitation. On January 26, 2012, the court granted permanent injunctive relief, entered an
order setting forth its findings and legal analysis, and directed entry of judgment for plaintiff.
The court advised that it would file by February 3, 2012, an opinion more fully addressing
the parties’ contentions. This opinion fulfills that objective, if not the ambitious time frame
for delivery.
FACTS
I. The Solicitation
The factual recitation is drawn from the administrative record, as supplemented. This
case concerns an attempted procurement of water and fuel systems by the Marine Corps
Systems Command (the “MCSC” or the “Corps”) in order to maintain the supplies—and
combat readiness—of the Marine Expeditionary Forces. On February 18, 2011, the MCSC
issued Solicitation M67854-11-R-5030 (the “Solicitation”) seeking competitive proposals
for the provision of Tactical Fuel Systems (“TFS”) and Water Supply Support Equipment
(“WSSE”), collectively referred to by the MCSC as Tactical Fuel and Water Systems
(“TFWS”), and their individual component parts. AR 358. The MCSC sought to award a
firm-fixed price requirements contract to span one base year and four option years with a
$99,000,000.00 ceiling. Id. The Solicitation informed potential offerors that the awardee
would be responsible for procuring, packaging, and shipping specified water- and fuelstorage systems and their component parts. Id. at 1622. The Solicitation was to be a 100
2
percent small-business set aside, and it incorporated the procedures for acquisition of
commercial items located in Federal Acquisition Regulation (“FAR”) Part 12, 48 C.F.R. Part
12 (2011). Id. at 358. The initial due date for proposal submissions was set as March 18,
2011, which later was extended to April 15, 2011. Id. at 358, 1342.
The administrative record discloses that the MCSC intended to make a single award
based on overall “[b]est [v]alue” to the MCSC. Id. at 1293. In determining “[b]est [v]alue,”
the Solicitation identified three factors that would be evaluated: (1) past performance, (2)
technical capabilities, and (3) price. Id. at 367. The Solicitation instructed potential offerors
to submit certain information regarding these three categories, see Id. at 365, 367-68, and
informed those potential offerors that “Past Performance is more important than Technical
and Price. Technical is more important than Price.” Id. at 367. Offerors were also alerted
that initial offers “should contain the offeror’s best terms from a price and technical
standpoint” because the “Government intend[ed] to evaluate offers and award a contract
without discussion with offerors.” Id. at 363.
Regarding past performance, the MCSC required offerors to provide past performance
information on “at least [two] programs underway or completed during the past [three] years
as a prime or subcontractor and [two] programs underway or completed during the past
[three] years by [their] subcontractors similar in content and scope to that proposed . . . .”
Id. at 365. The Solicitation also incorporated FAR 52.212-2, Evaluation—Commercial Items
(Jan 1999), which explained:
The Government will evaluate how well the Offeror performed on previous
relevant efforts of similar type (Tactical Fuel and Water Systems), size, and
complexity. The standard is based upon the Offeror’s ability to substantiate
credible examples of past performance inclusive of delivery schedule
compliance, quality, and overall customer satisfaction. Other relevant
information submitted by the offeror will be used to substantiate credible
performance.
Id. at 367.
With respect to the technical factor, the Solicitation informed offerors that “[t]he
Government will evaluate the offeror’s technical merit to assess its overall capability to fulfill
the SOW [“Statement of Work”] requirements.” Id. at 367. To this end offerors were
instructed to include particular information. Offerors first were asked to describe “[t]he size
and composition of the team that will be assigned to manage this task . . . [and to] [d]escribe
individual qualifications and experience relevant to this task for each position.” Id. at 365.
Further, offerors were to describe “[a]ll teaming arrangements to include prime and
3
subcontractors’ roles . . . [and to] [d]escribe the proposed work to be performed by you as
the prime and by each individual subcontractor.” Id. Offerors also were to provide, inter
alia, “a description of the[] warranty program and process” that they intended to offer to the
Government. Id. at 366.
Finally, for the pricing factor, offerors were instructed to complete a workbook of four
Excel spreadsheets included with the Solicitation. Id. Each spreadsheet represented a
contract line item number (“CLIN”) under the Solicitation and was divided, as follows: CLIN
0001 was for the water storage systems; CLIN 0002, the components to support the water
systems; CLIN 0003, the fuel storage systems; and CLIN 0004, the components to support
the fuel systems. See, e.g., id. at 369-84; 391-93; 394-401; 403-06 (listing items in each of
the respective CLINs). Each spreadsheet listed the specific items within that CLIN. See id.
Offerors were to propose a price for each item in each CLIN in each of four quantity bands
(0-10, 11-50, 51-100, and 101+). Id. at 359. The offerors were instructed to do this for each
of the five specified fiscal years. Id. Predicated on this information, the pricing information
would then be evaluated, as follows:
Price information presented by the offeror will be evaluated for
reasonableness. The Government will calculate an evaluated price for each
Offeror’s proposal by adding together all contract line item numbers (CLINs)
against an evaluated quantity. The total evaluated price equates to the pricing
of the CLINs presented in Attachment 5 - TFWS Pricing. The evaluated price
formula will be based on the total prices (TPs) in FY11-FY15 . . . .
(a)
Price proposal for contract line item (CLIN) 0001 WSSE
Systems List tab and CLIN 0003 TFS Systems List tab of
Attachment 5, will be weighted 80% for purposes of total
price evaluation.
(b)
Price proposal for CLIN 0002 WSSE Components List
tab and CLIN 0004 TFS Components List tab of
Attachment 5- TFWS Pricing, will be weighted 20% for
purposes of total price evaluation.
(c)
Total Evalued [sic] Price: CLIN 0001 TP *.80 + CLIN
0002 TP*.20 + CLIN 0003 TP*.80 + CLIN 0004 TP*
.20[.]
Id. at 367-68 (emphasis original).
The proposal submission period closed on April 15, 2011. See id. at 1342. Seven
offerors submitted proposals to the MCSC, including both plaintiff, GTA Containers, Inc.
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(“plaintiff”), and defendant-intervenor, J.G.B. Enterprises, Inc. (“intervenor”). 2/ Id. at
1343-44. In its proposal intervenor included the required past performance information in
section II. Id. at 1154. Intervenor indicated that “Tables 3 through 5 contain past
performance data for JGB suppliers.” Id. In Table 4, intervenor included past performance
data for [
], which indicated that [
] had
served as a previous supplier to intervenor and as a previous supplier to Defense Logistics
Agency (“DLA”) for components that were required by the Solicitation. Id. at 1158-59.
Intervenor specifically stated that [
] past performance included delivery of a [
] and indicated that [
].
Id. at 1158.
Moreover, when describing the teaming arrangements it would use to satisfy the MCSC’s
needs, intervenor indicated that “JGB is the source for approximately [
] of the part
numbers required by the TFS-LS/WSSE-LS program. The remaining are produced by a
variety of Original Equipment Manufacturers [(“OEMs”)] with whom JGB has had long and
successful relationships.” 3/ Id. at 1161. Intervenor also stated in its proposal that “[t]he
JGB response to the solicitation is fully compliant to all requirements.” Id. at 1153.
The MCSC evaluated the proposals from April 18, 2011, until June 13, 2011. Id. at
1342. In evaluating intervenor’s proposal, the Technical Evaluation Team (the “TET”)
understood intervenor to be proposing [ ] as a subcontractor supplier. See id. at 1297-98.
Regarding past performance—the most important factor in determining “[b]est [v]alue”—the
TET assigned intervenor a [
] rating and explained in its rationale that “[r]elevant
subcontractor past performance submissions [had been] submitted substantiating credible
TFS/WSSE experience.” Id. at 1297. Further, the TET assigned intervenor an [
]
technical rating and noted specifically: “[t]eaming arrangements with: [
]. Proposed work by prime and subcontractors adequately
2/ All of the details concerning plaintiff’s and intervenor’s proposals need not be
examined to adjudicate this dispute. Accordingly, the court will limit its discussion only to
those facts regarding the proposals that are necessary to resolving the issues presented by
plaintiff’s protest.
3/ Intervenor previously had represented that [
] was one of its OEMs to the
MCSC in its Contractor Capability Statement submitted to Maj. Travis L. Sutton—the
Contracting Officer and Source Selection Official for the procurement at issue—in response
to the MCSC’s Sources Sought/Request for Information. See AR 145. In response to the
MCSC’s instruction to “[p]rovide company name, proposed team members . . . and
description of related competencies,” intervenor explained that it was [
]. Id.
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addressed.” 4/ Id. at 1298. On July 6, 2011, the MCSC awarded Contract M67854-11-D5030 (the “Contract”) to intervenor. Id. at 1376. Concurrent with the award of the contract,
the MCSC issued Delivery Order 0001 in the amount of $42,521,776.00; and on the
following day, it issued Delivery Order 0002 in the amount of $4,657,341.00. See id. at
1395-99; 1401-05.
On July 22, 2011, plaintiff protested the award to the Government Accountability
Office (the “GAO”). Id. at 1587. However, because “certain important protest issues,”
Compl. filed Sept. 20, 2011, ¶ 11, would not be addressed, plaintiff withdrew its protest prior
to any decision from the GAO, id. at 1926. Instead, on September 20, 2011, plaintiff filed
its complaint in the United States Court of Federal Claims. In response to this action, the
MCSC voluntarily stayed performance on the contract until December 1, 2011, and the court
entered a briefing schedule. See Order entered Sept. 21, 2011, at 2. On October 13, 2011,
defendant filed notice that the MCSC intended to take corrective action by requesting a size
determination from the Small Business Administration (the “SBA”). See Def.’s Notice of
Corrective Action filed Oct. 13, 2011. On October 18, 2011, the MCSC did request from the
SBA a formal size determination of [
]. See Def.’s Notice of Action Taken Pursuant to
the Court’s Order of Oct. 24, 2011, filed Nov. 30, 2011, at App. 2. On October 24, 2011, this
court, in accordance with the parties’ joint proposal, remanded the matter to the contracting
officer to allow the MCSC to take action on the size determination and stayed the court
action. See Order entered Oct. 24, 2011.
The SBA rendered its size determination on November 22, 2011. AR 1979. The SBA
did not make an actual finding in addressing plaintiff’s allegation that [
] is a large
business. In response to SBA inquiries during its investigation, intervenor made several
important representations regarding [
]. The SBA decided that these representations
obviated the need for a size determination of [
]. In its November 7, 2011 letter to the
SBA, intervenor acknowledged that it had listed information in its proposal concerning
[
] past performance. Id. at 2127. As explained by intervenor,
[t]he intended purpose for including the past performance of [
] in our
proposal was to provide other relevant information as required by the proposal
instructions. . . . Our intention . . . was to either manufacture this item
ourselves or thru [sic] another viable small business manufacturer. [
]
was simply listed as they are the only previous supplier of the [
4/ [
] past performance was listed in Table 3 of section II of
intervenor’s proposal, the table immediately preceding [
]. See AR 1157-58.
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] that we listed in our proposal. We would only use [
] as a
technical reference point if questions arose during our assembly of the item.
Id. In its Size Determination Memorandum dated November 22, 2011, the SBA advised the
MCSC that, because intervenor “stated that it has no contractual agreements with [
]
including . . . joint venture agreements, agreements to share employees or any other
agreements,” and because intervenor “indicated in its response that it will not purchase any
items from [ ] for this contract” and would “find alternate sources for products that it had
proposed to purchase from [
] in its proposal,” the SBA did not proceed with a size
determination of [
]. Id. at 1985.
In the course of its investigation, however, the SBA discovered that intervenor had
proposed to acquire certain component parts from businesses that were classified as other
than small. While examining the sources of the 524 components that were listed in the
Solicitation CLINs, the SBA determined that intervenor had proposed to acquire “potentially
[ ] . . . from . . . large business[es].” Id. at 1987. Additionally, the SBA found that one
proposed component part actually was manufactured in Canada and that one proposed
supplier was a non-profit organization, which the SBA noted does “not qualify as [a] small
business[].” Id. Because of these findings, the SBA concluded, as follows:
The Small Business Administration - Area I finds JGB to be a small
business which qualifies as a kit-assembler for the contract in question, and as
a nonmanufacturer for orders in which it is supplying components made in the
United States by a small business. JGB is an other than small business for all
orders for which it is a nonmanufacturer and the component required is
manufactured by a large business or not in the United States.
Id. at 1988.
On November 29, 2011, after review of the SBA’s size determination, the MCSC
decided not to disturb the contract award to JGB. See Def.’s Notice of Action Taken
Pursuant to the Court’s Order of Oct. 24, 2011, filed Nov. 30, 2011, at App. 3. The MCSC
reasoned that intervenor “represented in its proposal that it will comply with all contract
requirements, and the face of its proposal does not lead to the conclusion that [intervenor]
will not or cannot comply with the non-manufacturer rule.” Id. Therefore, because “[t]he
face of [intervenor]’s proposal does not reflect that [
] will be used to furnish
supplies in a way that violates the non-manufacturer rule,” the MCSC deemed it unnecessary
to disturb the award. See id. at App. 4. This information was conveyed to the court on
November 30, 2011. See Def.’s Notice of Action Taken Pursuant to the Court’s Order of
Oct. 24, 2011, filed on Nov. 30, 2011.
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In its notice of corrective action, the MCSC also stated that, having inventoried its
water- and fuel-storage system items, it had “determined that it is necessary for us to begin
partial performance of the contract.” Id. at App. 5. To support this determination, William
P. Macecevic, Jr., Program Manager for the Marine Corps Engineer Systems, submitted his
declaration. See Declaration of William P. Macecevic, Jr., Nov. 29, 2011. Mr. Macecevic
indicated that the inventory for fuel-storage systems and components was “critically low” and
that “[s]everal Marine Corps units . . . hold stocks below the 85% of required wartime
quantities . . . and are at substantial risk of being unable to perform their operational
missions.” Macecevic Decl. ¶¶ 6-8. Because of this shortage, the MCSC indicated that it
intended to place orders on the contract to replenish those supplies that had fallen below the
85 percent threshold for military readiness. See id. ¶ 12. Plaintiff did not move to enjoin this
partial performance, and on December 1, 2011, upon the expiration of the voluntary stay, the
MCSC modified its initial order, Def.’s Br. filed Jan. 6, 2012, at 14, and began procurement
of a number of items originally listed in Delivery Order 0001 with a total cost of
$29,960,193.53, see Macecevic Decl. at Ex. 2.
On December 5, 2011, plaintiff filed a response to defendant’s update, reiterating its
position that the award of the contract to intervenor was improper for a number of reasons.
See Pl.’s Notice Pursuant to the Court’s Order of Oct. 24, 2011 and Resp. to Def.’s Nov. 30,
2011 Notice of Action Taken, filed Dec. 5, 2011, at 2-3. This court held a status conference
on December 7, 2011, for the purpose, inter alia, of determining whether to entertain a
motion for a preliminary injunction and indicated that plaintiff was likely to succeed on the
merits of its misrepresentation claim. Because defendant agreed to consolidation of any
request for a preliminary injunction with a hearing on the merits and final resolution of
plaintiff’s protest, see Transcript of Proceedings, GTA Containers, Inc. v. United States,
No. 11-606C, at 27-29 (Fed. Cl. Dec. 7, 2011) (“Tr.”), this court also indicated that it would
not grant preliminary injunctive relief in deference to the military’s assessment of urgent
material needs. Subsequent to the status conference, the court ordered defendant to
supplement the administrative record with the documents concerning the MCSC’s and
intervenor’s communications with the SBA and set a briefing schedule for filing and arguing
cross-motions for judgment on the administrative record that would allow for a decision by
late January. See Order entered Dec. 7, 2011.
On December 15, 2011, defendant filed notice that the MCSC intended to cancel the
contract award to intervenor on the following day. See Def.’s Notice filed Dec. 15, 2011.
However, defendant also stated that, “[g]iven the military necessity that gave rise to the
delivery order of December 1, 2011, the termination will not encompass the obligation of
[intervenor] to perform that order.” Id. The contract award was terminated accordingly,
which left Delivery Order No. 0001 as the procurement vehicle, and on December 20, 2011,
defendant filed its motion to dismiss, arguing that the complaint should be dismissed as moot
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given that the MCSC had taken definitive action by canceling the contract, see Def.’s Mot.
filed Dec. 20, 2011, at 1.
On December 22, 2011, plaintiff filed its motion for judgment on the administrative
record, arguing, at bottom, that the MCSC should be required to cancel the entire
procurement and that the MCSC’s decision amounted to an improper partial award. Plaintiff
responded to defendant’s motion to dismiss on January 6, 2012, and on the same date,
defendant and intervenor filed their responses and cross-motions for judgment on the
administrative record. Plaintiff responded to defendant and intervenor’s motions on January
13, 2012.
On January 20, 2012, the Friday preceding the scheduled January 25, 2012 argument,
defendant filed Defendant’s Notice of Additional Corrective Action. Defendant represented
that the MCSC intended to take further corrective action and once again pare down its order
placed on the contract by terminating for convenience revised Delivery Order No. 0001 for
a number of the items. See Def.’s Notice of Additional Corrective Action filed Jan. 20,
2012. By this termination the MCSC would be procuring only fuel-system components at
a total cost of $9,927,614.00. Id.
DISCUSSION
I. Plaintiff’s standing to challenge the Solicitation and mootness of plaintiff’s protest
The threshold question in any protest is whether or not plaintiff has standing to bring
its grievance before the court. See Myers Investigative & Sec. Servs. v. United
States, 275 F.3d 1366, 1369-70 (Fed. Cir. 2002) (“[S]tanding is a threshold jurisdictional
issue. . . . [P]rejudice (or injury) is a necessary element of standing.”) To have standing to
bring a protest action, the protester must demonstrate that it is an “interested party objecting
to a solicitation by a Federal Agency.” 28 U.S.C. § 1491(b)(1) (2006). To satisfy this
standard, the “interested party” must show that it is (1) “‘an actual or prospective bidder[]
or offeror[]’” and (2) its “‘direct economic interest [is] affected by the award of the contract
or by failure to award the contract.’” Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307
(Fed. Cir. 2006) (quoting Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d 1294, 1302
(Fed. Cir. 2001) (adopting language of the Competition in Contracting Act, 31 U.S.C. §
3551(2) (2006))). An interested party is one who “can show that but for the error, it would
9
have had a substantial chance of securing the contract.” Labatt Food Serv., Inc. v. United
States, 577 F.3d 1375, 1378 (Fed. Cir. 2009) (citations omitted). 5/
The facts of the present case establish that plaintiff has standing to bring this
challenge. Plaintiff has demonstrated that it meets both prongs of the Rex Service test. First,
plaintiff submitted a proposal in response to the MCSC’s Solicitation, see AR 936-57; 104770, and the fact that plaintiff lost the award to intervenor demonstrates that its “direct
economic interest” was affected by the award decision. Further, plaintiff has demonstrated
that it is an “interested party” as defined by the Federal Circuit in Labatt Food Service. See
577 F.3d at 1378. According to the June 12, 2011 Source Selection Decision Document,
plaintiff was ranked third on non-price factors—the most important factors in the award
decision—and was ranked third on price. See AR 1344-46. Given that the offeror that
ranked second in non-price factors proposed the highest price of all seven offerors, see id.,
plaintiff’s claim that, but for the consideration of intervenor’s proposal, plaintiff had a
“substantial chance” of securing the award is sufficient to establish standing. See also id. at
1606 (noting that during debriefing, contracting officer relayed to plaintiff that it was in the
competitive range “‘so to speak’”).
Intervenor’s arguments to the contrary are not persuasive. Advancing three reasons,
intervenor contends that plaintiff lacks standing to bring this protest because it cannot make
the requisite showing for interested-party status. 6/ First, intervenor argues that plaintiff has
not proven that it submitted a proposal in compliance with the terms of the Solicitation. See
Intvr.’s Br. filed Jan. 7, 2012, at 14. According to intervenor, plaintiff proposed a teaming
5/ Considerable confusion appears in the case law regarding the burden a party must
carry to demonstrate “prejudice” sufficient to establish standing and the burden to
demonstrate “prejudice” to succeed on the merits. See generally Dyonyx, L.P. v. United
States, 83 Fed. Cl. 460, 465-66 n.2 (2008) (noting that “[i]n essence, these are incongruent,
although slightly overlapping, standards”); Textron, Inc. v. United States, 74 Fed. Cl. 277,
284-85 (2006) (summarizing Federal Circuit case law on the matter). “Although the
prejudice requirement for standing has been satisfied by a nominal showing that a protester
could compete for the contract, the prejudice requirement required for success on the merits
consistently has been more stringent.” Dyonyx, 83 Fed. Cl. at 465-66 n.2 (citations omitted)
(internal quotation marks omitted).
6/ This court takes particular notice of the fact that defendant does not adopt the
arguments on standing advanced by intervenor. In fact, the only argument defendant
advanced regarding standing, as discussed in detail infra, was that the merits of this protest
need not be reached because the controversy has been rendered moot by the MCSC’s
corrective action. See Def.’s Br. filed Jan. 6, 2012, at 18-19.
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arrangement with [
], a company that is “not found on the SBA website,
is not registered with the CCR [“Central Contractor Registration” system], and lists various
suppliers that are either large businesses or are also not registered with the CCR database.”
Id. Plaintiff responded by noting that the CCR listing was not required for [
] because
the CCR only applies to prime contractors dealing directly with the Government, not
subcontractors. See Pl.’s Br. filed Jan. 13, 2012, at 26 n.7. This court concurs with
plaintiff’s response, especially in light of the lack of support for this position from defendant.
Second, intervenor argues that plaintiff was “incapable of performing the contract.”
Intvr.’s Br. filed Jan. 7, 2012, at 14. This is a gross overstatement of the consequence of the
MCSC’s assigning plaintiff a [
] rating under the Technical category. The MCSC,
or subsequently defendant in court, has never taken the position that plaintiff was incapable
of performing the work it proposed. Although the MCSC found that it would expose itself
to risk should plaintiff receive the award, see AR 1299, a potential risk to the Government
in contract performance is not tantamount to an offeror being incapable of performance.
Lastly, intervenor argues that plaintiff is unable to prove that, but for the alleged errors
in the award of the contract, it would have received the contract award. See Intvr.’s Br. filed
Jan. 7, 2012, at 14-15. Intervenor’s reading of the standing requirements imposed on a
protester is too stringent. Plaintiff need not establish specifically that it would have received
the contract but for the error alleged; rather, plaintiff must show only that it had a “substantial
chance of securing the contract.” See Labatt Food Serv., 577 F.3d at 1378. Second, as
explained above, this court finds that plaintiff has made the requisite showing. While
intervenor accurately observes that another offeror had a lower price overall than plaintiff,
it fails to take into consideration that the offeror that was ranked second in price was ranked
fourth in non-price factors—i.e., behind plaintiff. See AR 1344-46. Given that the
Solicitation stated that the non-price factors were more important than price, see id. at 367,
this court finds that plaintiff did have a substantial chance of receiving the contract award
if intervenor’s proposal was disregarded.
Defendant’s motion to dismiss also argues that the MCSC’s corrective actions moot
the pending protest, thereby placing plaintiff’s claims outside the court’s jurisdiction.
Jurisdiction must be established before the court may proceed to the merits of a case. Steel
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 88-89 (1998). Courts are presumed to lack
subject matter jurisdiction unless it is affirmatively indicated by the record; therefore, it is
a plaintiff’s responsibility to allege facts sufficient to establish the court’s subject matter
jurisdiction. Renne v. Geary, 501 U.S. 312, 316 (1991); DaimlerChrysler Corp. v. United
States, 442 F.3d 1313, 1318 (Fed. Cir. 2006) (“[I]t is settled that a party invoking federal
court jurisdiction must, in the initial pleading, allege sufficient facts to establish the court’s
jurisdiction.” (citations omitted)).
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As with standing, the mootness doctrine originates from the “case or controversy”
requirement of Article III of the United States Constitution. Gerdau Ameristeel Corp. v.
United States, 519 F.3d 1336, 1340 (Fed. Cir. 2008) (citing Allen v. Wright, 468 U.S. 737,
750 (1984); North Carolina v. Rice, 404 U.S. 244, 246 (1971)). Federal courts are permitted
to entertain only matters in which there is an ongoing justiciable issue. See NEC Corp. v.
United States, 151 F.3d 1361, 1369 (Fed. Cir. 1998). As such, mootness implicates the
court’s subject matter jurisdiction. Id. (“If a case becomes moot it no longer presents a
justiciable controversy over which a federal court may exercise jurisdiction.”). “[A] case is
moot when the issues presented are no longer ‘live’ or the parties lack a legally cognizable
interest in the outcome.” Powell v. McCormack, 395 U.S. 486, 496 (1969) (citation omitted).
“Thus, to avoid dismissal for mootness, an actual controversy must remain at all stages, not
merely at the time the complaint is filed.” Gerdau Ameristeel, 519 F.3d at 1340.
A case will be dismissed as moot if an intervening event during its pendency “renders
it impossible for [the] court to grant any effectual relief.” Cyprus Amax Coal Co. v. United
States, 205 F.3d 1369, 1372-73 (Fed. Cir. 2000) (holding tax refund suit not moot despite
plaintiff’s subsequent compliance with tax refund statute because plaintiff could potentially
recover additional taxes under Tucker Act rather than under tax refund claim). As explained
by the United States Supreme Court, “jurisdiction, properly acquired, may abate if the case
becomes moot because (1) it can be said with assurance that ‘there is no reasonable
expectation . . .’ that the alleged violation will recur, and, (2) interim relief or events have
completely and irrevocably eradicated the effects of the alleged violation.” County of Los
Angeles v. Davis, 440 U.S. 625, 631 (1979) (citations omitted). “When both conditions are
satisfied it may be said that the case is moot because neither party has a legally cognizable
interest in the final determination of the underlying questions of fact and law.” Id.
Defendant argues that, because “the agency has terminated the underlying contract
award and cancelled the solicitation,” the protest is now moot, Def.’s Br. filed Dec. 20, 2011,
at 6, regardless of the Corps’s continuing limited procurement based solely on “critical
military need,” id. at 10. Defendant contends that after the MCSC took corrective action,
“the controversy underlying this protest is no longer live” and “[w]hether the Marine Corps
erred in its evaluation process is an academic question that does not affect the [plaintiff].”
Def.’s Br. filed Jan. 20, 2012, No. 81, at 1. According to defendant, “[i]t does not matter
whether the Marine Corps made an irrational decision in awarding the contract to JGB
Enterprises. Likewise, it does not matter whether the Marine Corps committed a clear and
prejudicial violation of law in the procurement.” Id. at 2.
The court finds this argument unpersuasive. Defendant essentially is contending that
no contract exists because the Corps took corrective action in canceling the Solicitation,
12
thereby mooting plaintiff’s protest. Ordinarily, defendant is correct that the termination of
a sued-upon contract would moot a challenge to the award of that contract. Unfortunately
for defendant, that is not the case here because work is still proceeding on the awarded
contract under the auspices of “military necessity”—a contradiction that defendant did not
directly address. At the same time that defendant is attempting to argue before the court that
the contract no longer is in effect, it also is arguing that “there is nothing ‘improper and
illegal’ about the critical order for fuel systems.” Id. at 6. Despite assertions that the contract
has been canceled, defendant rationalizes that “[t]he agency had no need to resort to a solesource procurement when it could obtain the fuel systems through an existing contract
vehicle.” Id. While this court does not doubt, nor take issue with, the Corps’s declarations
of its needs, defendant cannot have it both ways—there is no contract existing to protest, but
there is one under which to make delivery orders. Consequently, this court finds that, while
the MCSC has taken corrective action, that action has not mooted plaintiff’s protest because
it amounts to only a partial termination of the allegedly illegal contract award. A live
controversy is at issue, the resolution of which will address the injury claimed by plaintiff.
II. Standard of review in bid protest actions
The Administrative Dispute Resolution Act of 1996, Pub. L. No. 104-320, § 12, 110
Stat. 3870, 3874 (codified at 28 U.S.C. § 1491(b)) (the “ADRA”), amended the Tucker Act,
28 U.S.C. § 1491(b)(1), granting the Court of Federal Claims jurisdiction over bid protests.
See Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1243 (Fed. Cir. 2010);
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1330-32
(Fed. Cir. 2001) (“Domenico Garufi”). The ADRA’s standard of review for agency
procurement decisions adopted the standard of review set forth in the Administrative
Procedure Act, 5 U.S.C. § 706 (2006) (the “APA”). See 28 U.S.C. § 1491(b)(4). The court
has authority under the APA to set aside only an agency action that is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see
also PGBA, LLC v. United States, 389 F.3d 1219, 1224-28 (Fed. Cir. 2004) (clarifying that
ADRA incorporates arbitrary and capricious standard of APA to review procurement
decisions); see also Domenico Garufi, 238 F.3d at 1332-33 (making applicable the standards
applied in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and its progeny to
bid protests).
Accordingly, as restated by the Federal Circuit, “[a] bid protest proceeds in two steps.”
Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). First, the court
determines if, under the arbitrary and capricious standard, the agency acted either (1) without
13
rational basis, or (2) contrary to law 7/. Id.; see Banknote Corp. of Am., Inc. v United States,
365 F.3d 1345, 1351 (Fed. Cir. 2004); Domenico Garufi, 238 F.3d at 1333; Statistica, Inc.
v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996); Aeroplate Corp. v. United States, 67
Fed. Cl. 4, 8 (2005). Second, if the court finds that the agency acted in violation of the APA
standard, “then it proceeds to determine, as a factual matter, if the bid protester was
prejudiced by that conduct.” Bannum, 404 F.3d at 1351. In either case the plaintiff bears
the “heavy burden” of proving this lack of rational basis or violation of the law by a
preponderance of the evidence. Domenico Garufi, 238 F.3d at 1333.
If the agency action is determined to have violated an applicable procurement
regulation, the court proceeds to address whether the action was significantly prejudicial to
the protester. See Bannum, 404 F.3d at 1351, 1353; see also Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (“When a challenge is brought on the
second ground [of the Bannum test], the disappointed bidder must show a clear and
prejudicial violation of applicable statutes or regulations.” (citation omitted) (internal
quotation marks omitted)). Even if a plaintiff can show that a procurement violation
occurred, “[t]he prejudice determination assesses whether an adjudged violation of law
warrants setting aside a contract award.” Bannum, 404 F.3d at 1354. When making this
evaluation, the court must be mindful that “[p]rejudice is a question of fact.” Id. at 1353
(citation omitted); Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057 (Fed.
Cir. 2000). “To establish prejudice, the claimant must show that there was a ‘substantial
chance it would have received the contract award but for that error.’” Galen Med. Assocs.,
Inc. v. United States, 369 F.3d 1324, 1331 (Fed. Cir. 2004) (quoting Statistica, Inc., 102 F.3d
at 1582); see also CACI, Inc.-Fed. v. United States, 719 F.2d 1567, 1574-75 (Fed. Cir.1983)
(explaining that, in order to show prejudice, plaintiff need only show “‘that it was within the
zone of active consideration’” (quoting Morgan Bus. Assocs. v. United States, 619 F.2d 892,
896 (Ct. Cl. 1980))); accord Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365,
1367 (Fed. Cir. 1999). It is important to note that a plaintiff need not establish strict but-for
causation in order to meet its burden of demonstrating that the agency’s procurement
violation was prejudicial. See Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.
1996).
III. Standards of review for judgment on the administrative record and for injunctive relief
The parties filed cross-motions for judgment on the administrative record pursuant to
RCFC 52.1(c). This rule provides a procedure that allows the court to expedite a trial by
using a “paper record, allowing fact-finding by the trial court.” Bannum, 404 F.3d at 1356.
7/ This language encompasses the alternative ground for a bid protest: whether the
agency action constituted a clear and prejudicial violation of an applicable procurement
regulation. See Domenico Garufi, 238 F.3d at 1332-33.
14
Unlike a motion for summary judgment, a genuine dispute of material fact does not preclude
a judgment on the administrative record. Id. at 1355-56.
Plaintiff seeks a permanent injunction enjoining the MCSC from continuing to
procure under its emergency order—revised Delivery Order No. 0001. The Federal Circuit
has described injunctive relief as “extraordinary relief.” FMC Corp. v. United States, 3 F.3d
424, 427 (Fed. Cir. 1993); see CACI, 719 F.2d at 1581. Adoption of the APA substantive
standard of review did not change the court’s standard for granting injunctive relief. See
PGBA, 389 F.3d at 1225-26 (clarifying that ADRA incorporates arbitrary and capricious
standard of APA to review procurement decisions, but did not change court’s discretion in
granting remedy of injunctive relief). In order to obtain an injunction, the Federal Circuit
requires a protester to establish that “(1) the plaintiff has succeeded on the merits, (2) the
plaintiff will suffer irreparable harm if the court withholds injunctive relief, (3) the balance
of hardships to the respective parties favors the grant of injunctive relief, and (4) the public
interest is served by a grant of injunctive relief.” Centech Grp., Inc. v. United States, 554
F.3d 1029, 1037 (Fed. Cir. 2009). Success on the merits previously has been held to be the
most important factor for a court to consider when deciding whether to issue injunctive relief.
See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007).
IV. Material misrepresentation
Plaintiff’s primary challenge to the award of the contract is that intervenor made a
material misrepresentation in its proposal by listing [
] as a supplier to be used in the
completion of the procurement. In order to establish a material misrepresentation, “plaintiff
must demonstrate that (1) [the awardee] made a false statement; and (2) the [agency] relied
on that false statement in selecting [the awardee]’s proposal for the contract award.” Blue
& Gold Fleet, LP v. United States, 70 Fed. Cl. 487, 495 (2006) (citation omitted), aff’d, 492
F.3d 1308 (Fed. Cir. 2007); see also Sealift, Inc v. United States, 82 Fed. Cl. 527, 538
(2008). 8/ According to the Federal Circuit,
the submission of a misstatement . . . which materially influences consideration
of a proposal should disqualify the proposal. The integrity of the system
demands no less. Any further consideration of the proposal in these
8/ This court is aware of the decision in Northrop Grumman Corp. v. United States,
50 Fed. Cl. 443 (2001), in which the Court of Federal Claims stated that a misstatement in
a proposal “is not something to be punished unless the errors were willful and egregious.”
That opinion would require some proof that the awardee’s actions were “sinister, not just
deficient or overestimated,” id. at 469. This grafting of additional requirements onto the
standard for a material misrepresentation is not supported by binding precedent, and this
court declines to impose this heightened burden.
15
circumstances would provoke suspicion and mistrust and reduce confidence
in the competitive procurement system.
Planning Research Corp. v. United States, 971 F.2d 736, 741 (Fed. Cir. 1992) (citation
omitted) (internal quotation marks omitted) (illustrating misrepresentation tactic known as
“bait and switch” in which offeror submits proposal with the intent to substitute some aspect
that it had used to win award). Thus, if plaintiff can establish that (1) intervenor falsely
indicated that [
] was a subcontractor that intervenor intended to use in the work
performed under the Solicitation and (2) the MCSC relied upon this representation in
awarding the Contract, then plaintiff has met its burden of proving a material
misrepresentation.
As an initial matter, this court rejects defendant’s attempts to vary the
misrepresentation analysis depending on where on a procurement time line one examines the
statements at issue. See Def.’s Br. filed Jan. 6, 2012, at 20-29. Analyzing
misrepresentations that may have occurred at other stages of this protracted legal battle is
unnecessary because the controlling issue is whether or not intervenor made a material
misrepresentation in its proposal to the MCSC. 9/ The MCSC was entitled to rely on
intervenor’s representations in its response to the Solicitation, and it is irrelevant that
intervenor’s proposal was facially acceptable. See id. at 22. Defendant has mistaken the
nature of the required analysis. It is axiomatic that material misrepresentation claims arise
from proposals that appear facially valid because an agency would not make an award based
on a patently obvious misrepresentation. Instead, it is the nature of a misrepresentation to
appear valid on its face because that validity—indeed appeal—is what leads to reliance by
the agency. Thus, courts do not examine the subjective mindset of the agency, but instead
look only to whether or not the statement itself constitutes misrepresentation—something that
is determinable the moment that it is submitted for agency consideration—and then whether
or not the agency relied on that statement in making its award decision. As long as the
representation has in fact been made, then it is appropriate to apply the misrepresentation
standard, regardless of when the information casting doubt on the statement came to light.
9/ In the same vein, two reasons counsel against addressing plaintiff’s contention that
the SBA review is part of the award process and thereby binding on the agency. First, the
material misrepresentation is dispositive in this bid protest. Second, the court’s focus of
review is what was represented to the MCSC in intervenor’s proposal; the fact that evidence
of a misrepresentation came to light in communications with the SBA specifically is
irrelevant. What is relevant is the light that the statements made to the SBA shed on the
statements made to the MCSC, not to whom those statements were made. Because of the
foregoing, this court finds it unnecessary to opine on the exact role that a referral to the SBA
plays in an ongoing protest.
16
The material misrepresentation claim in this case stems from the information
requested from the potential offerors in the Solicitation and the manner in which intervenor
structured its proposal. The Solicitation instructed offerors, regarding past performance, to
provide particular information on at least “2 programs underway or completed during the past
3 years by your subcontractors similar in content and scope to that proposed.” AR 365.
Among the information to be provided about the offeror’s subcontractors was a
“[d]escription of relevance to proposed work.” Id. The MCSC informed potential offerors
that past performance was the most important factor to be evaluated and that the Government
would “evaluate how well the Offeror performed on previous relevant efforts of similar
type.” Id. at 367.
In response to this particular requirement in the Solicitation, intervenor devoted an
entire section to past performance in its proposal. See id. at 1154-60. According to
intervenor’s proposal, “Tables 3 through 5 contain past performance data for JGB suppliers.”
Id. at 1154. Table 3 was titled [
]. Id. at 1157.
Under the first, “Relevance to Proposed Work,” intervenor stated, [
] and, under the second, [
]. Id. at
1157-58. Table 4 was listed immediately beneath Table 3 and was titled [
]. Id. at 1158. Under the first “Relevance” entry, intervenor
stated, [
]. Id. The second “Relevance” entry
stated [
]. Id.
This court also has examined the technical aspects of intervenor’s proposal in order
to appreciate fully the context in which the MCSC considered and evaluated the proposal.
Under “Teaming Arrangements,” intervenor stated that “JGB is the source for approximately
[ ] of the part numbers required . . . . The remaining are produced by a variety of [OEMs]
with whom JGB has had long and successful relationships.” Id. at 1161. As noted above,
intervenor previously had communicated to the MCSC that its “key tactical fuel and water
components OEMs include . . . [
].” Id. at 145. Intervenor then details a teaming
arrangement with [
]. Id. at 1162. Following, under the section “Prime and
Subcontractors’ Roles,” intervenor explained that “[s]pecific hardware suppliers will perform
as subcontractors to JGB. Their role is to deliver fully compliant hardware, on time, to JGB
in response to orders.” Id.
17
The first issue is whether or not intervenor represented that [
] was being
proposed as a supplier—thereby meaning, based on the language and presentation of
intervenor’s proposal, that [
] would be a subcontractor on this effort. Interestingly, a
consensus among the parties has emerged that these representations in intervenor’s proposal
do indicate that [
] was being offered as a supplier of [ ] component parts. Defendant’s
analysis of the proposal led it to state that “[t]he only reasonable conclusion is that [
]
was a supplier, but that JGB Enterprises would not use [
] to supply end items in a way
that violates the small-business requirements.” Def.’s Br. filed Jan. 6, 2012, at 23.
Intervenor also stated that “a review of the proposal will reveal that . . . JGB did mention
[
] as a supplier.” Intvr.’s Br. filed Jan. 7, 2012, at 19. This court agrees with those
assessments.
Given that this court has found that intervenor did represent to the MCSC that it was
proposing [
] as a supplier, the next issue is whether or not this representation was false
or misinformation.
The evidence presented—most notably in the form of the
communications that intervenor had with the SBA—indicates that intervenor proposed [
] as a means to secure a high past performance rating. In response to inquiries from the
SBA, intervenor stated, as follows:
The intended purpose for including the past performance of [
] in our
proposal was to provide other relevant information as required by the proposal
instructions. In particular the [
] . . . is an item that past
procurement history rests exclusively with [
] . . . . You will notice that
every purchase of this item by the military since 2005 has been awarded to [
]. Our intention as previously stated in this letter was to either manufacture
this item ourselves or thru [sic] another viable small business manufacturer.
[
] was simply listed as they are the only previous supplier of the [
]
that we listed in our proposal. We would only use [
] as a technical
reference point if questions arose during our assembly of the item.
AR 2127. In light of all the evidence, this explanation is equivocal.
Intervenor’s position is that it provided this information to the MCSC because, in all
other instances, the military procured this part through [
]. In other words, intervenor
wanted to list [
] in the past performance section of its proposal not because it had a
supply arrangement in place for this particular contract, but simply because the MCSC was
familiar with [
]. This begs the obvious question: why list a fact that (1) the MCSC
already knows, and (2) is completely irrelevant to the manner in which intervenor intended
to satisfy the demands of this procurement. The equally obvious answer is that intervenor
was seeking to bolster its past performance evaluation, given that this was the most important
factor to the award under the Solicitation.
18
When pressed about [
] involvement with this procurement, intervenor stated
that [
] would only “supply” it with technical services to help intervenor manufacture the
part itself. 10/ This explanation of the duties to be preformed by [
] is not supported by
the record that was available when the representations were made to the MCSC. Absolutely
no evidence in the technical section of intervenor’s proposal indicates that one of the duties
of intervenor’s subcontractors was to act as a “technical reference point.” See AR 1160-67.
Moreover, the SBA found that “[t]here are no other indicia of potential affiliation between
JGB and [
] such as joint venture agreements, financial agreements or other
contractual agreements.” Id. at 1985. It is inconceivable that [
] would be providing
technical information to a separate business without a contract in place that provides it with
remuneration for its services, thereby leading this court to wonder whether [
] is even
aware of the role that intervenor has assigned to it. Based on the evidence presented, this
court finds that the listing of [
] as a supplier in the proposal was a misrepresentation of
the role that [
] was to play should intervenor win the award, given that intervenor
explicitly stated to the SBA that it was never intervenor’s intention to use [
] as a
supplier of the parts for which it listed past performance.
The final issue is whether or not the MCSC relied on the misrepresentation when
making the award decision. Again, the answer must be in the affirmative based upon the
TET’s narrative evaluation of intervenor. See id. at 1297-98. In the past performance
evaluation section, the TET gave intervenor a [
] rating based on [
]. Id. at 1297. Although this statement by itself is vague, the narrative relating
to the technical factor provides the necessary context. In giving intervenor an [
]
technical rating, the TET stated, “[t]eaming arrangements with: [
]. Proposed work by prime and subcontractors adequately
addressed.” Id. at 1298. It is not at all apparent why the MCSC inferred a teaming
arrangement between [
] and intervenor. However, what that explanation does show is
that MCSC placed great emphasis on the fact that [
] involvement was delineated in
intervenor’s proposal, and, consequently, the TET awarded intervenor high marks for the two
most important evaluation factors. Defendant even concedes that “the Marine Corps based
its evaluation in part upon its belief that [
] was a supplier in some capacity.” Def.’s Br.
filed Jan. 6, 2012, at 25. In addition, this court notes that the MCSC was justified in thinking
that the listing of [
] past performance information indicated that it was being proposed
as a subcontractor, given that the instructions in the Solicitation required potential offerors
to list past performance information for “your subcontractors.” AR 365. The MCSC can be
excused for not assuming that [
] was being listed simply because it had previously
10/ Intervenor represented during oral argument that, in fact, [
entity that manufactured this component part.
19
] was the only
supplied the Marine Corps with those component parts on separate, unrelated occasions. In
fact, this is the only rational way to interpret intervenor’s listing [
] past performance.
Therefore, this court finds that plaintiff has met its burden by showing that intervenor
made a material misrepresentation in listing [
] past performance; that intervenor
represented to the MCSC that [
] was being proposed as a supplier and a subcontractor
for this procurement; and that this constitutes a clear violation of an applicable procurement
regulation, FAR 52.212-2. Having found a violation of a procurement regulation, this court
next conducts “the prejudice determination [to] assess[] whether an adjudged violation of
law warrants setting aside a contract award.” Bannum, 404 F.3d at 1354. As stated above,
“[t]o establish prejudice, the claimant must show that there was a ‘substantial chance it would
have received the contract award but for that error.’” Galen Med. Assocs., 369 F.3d at 1331
(quoting Statistica, Inc., 102 F.3d at 1582); see also Alfa Laval Separation, 175 F.3d at 1367
(noting that, in order to show prejudice, plaintiff need only show that it was within zone of
active consideration).
Based on the facts presented in this case, the court does find the procurement violation
to have been prejudicial to plaintiff. The MCSC’s evaluation showed that the agency relied
on the misrepresentation in evaluating intervenor’s past performance. See AR 1297-98.
Because of this misrepresentation, intervenor received a favorable rating for past
performance—the most important criterion for selecting the awardee of the contract. Had
intervenor not been assigned such a [ ] past performance rating—or been considered at all
given its material misrepresentation—then plaintiff would have had a substantial chance of
winning the contract award. Plaintiff was ranked third with respect to price and non-price
factors. Id. at 1344-46. The offeror that was ranked ahead of plaintiff in non-price factors
ranked last in price, and the offeror ranked second in price was ranked behind plaintiff in the
more important non-price factors. See id. Furthermore, plaintiff has argued that, during
debriefing, the MCSC contracting officer explicitly conveyed to plaintiff that it was “in the
competitive range ‘so to speak,’” id. at 1606, a statement that defendant has never disputed.
Given the competitive position that plaintiff was in, the award of the contract to intervenor
based on a misrepresentation did prejudice plaintiff sufficiently for plaintiff to succeed on
the merits of its challenge. 11/
11/ Because the court finds the material misrepresentation claim dispositive on the
merits, the court does not reach plaintiff’s argument on the SBA’s size determination and the
effect of 13 C.F.R. 121.1009(g)(2) (2011). Moreover, it would be imprudent for the court
to decide that issue on the briefing currently before the court. The parties’ briefs do not
adequately address the issue that prompted the change in the regulation’s language nor how
the revised language applies to a mixed finding of eligibility from the SBA, as opposed to
a unitary size determination. Lacking precedent and further guidance, an attempted
resolution of the new issues presented by this regulation likely would hinder later decisions
on its applicability without aiding the resolution of the case at bar.
20
V. Whether the MCSC utilized the methodology established by the Solicitation
to evaluate offerors’ prices
Plaintiff has also advanced an additional argument on the merits regarding the
evaluation of price data performed by the MCSC. Plaintiff charges that the MCSC failed to
follow the methodology for evaluating all of the offerors’ price proposals as established by
the Solicitation and as addressed by the agency in the pre-bid questions and answers. See
Pl.’s Br. filed Dec. 22, 2011, at 31. Included with the Solicitation was a workbook with
several spreadsheets that the MCSC asked each offeror to fill in with its pricing data. See
AR 366. In completing these spreadsheets, an offeror was to enter a price for every single
item that potentially could be ordered under the contract. See id. This methodology required
offerors to quote the unit price of each item should the MCSC order between 1-10 units of
that item, 11-50 units, 51-100 units, and greater than 100 units, and to provide such price
quotations for the five fiscal years covered by the contract. See id. The Solicitation, in
relevant part, provided that “[p]rice information presented by the offeror will be evaluated
for reasonableness. The Government will calculate an evaluated price for each Offeror’s
proposal by adding together all contract line item numbers (CLINs) against an evaluated
quantity.” Id. at 367.
Plaintiff argues that the MCSC did not follow this framework in evaluating the
proposals. According to plaintiff, the MCSC failed to select and apply an evaluated quantity
and thus make a reasonableness determination “‘against an evaluated quantity.’” See Pl.’s
Br. filed Dec. 22, 2011, at 32 (quoting AR 367). Instead, plaintiff argues that the MCSC
“simply totaled all the proposed prices quoted for a particular CLIN, including each of the
different alternative, quantity-based prices for that CLIN . . . without regard to the quantities
that those prices applied to . . . .” Id. (emphasis omitted). “[A]lthough the RFP [“Request
for Proposal”] required offerors to insert in their proposals the proposed prices for various
quantities of ordered items . . . the price evaluation was not based on a comparison of an
offeror’s proposed prices for any particular quantity.” Id. Plaintiff concludes that this
method of evaluating prices was arbitrary and the departure from the Solicitation’s
framework was unreasonable.
Defendant first counters that this challenge to the Solicitation’s pricing scheme has
been waived “because that scheme was set forth in the solicitation and the Marine Corps did
not deviate from it.” Def.’s Br. filed Jan. 6, 2012, at 31. Thus defendant argues that
plaintiff’s challenge under the Federal Circuit’s decision in Blue & Gold, 492 F.3d at 1312,
is actually to the methodology employed by the MCSC and therefore is untimely. The
Federal Circuit ruled in Blue & Gold that “a party who has the opportunity to object to the
terms of a government solicitation containing a patent error and fails to do so prior to the
close of the bidding process waives its ability to raise the same objection subsequently in a
21
bid protest action . . . .” Id. at 1313. According to the Federal Circuit, “[v]endors cannot sit
on their rights to challenge what they believe is an unfair solicitation, roll the dice and see
if they receive [the] award and then, if unsuccessful, claim the solicitation was infirm.” Id.
at 1314 (citation omitted).
This court agrees that the automatic summation of the columns in the spreadsheets
provided did convey information to the offerors as to the types of information that the MCSC
would be considering. It is also a fact that the offerors noticed the apparent discrepancy
between what they were being asked to provide—pricing information for each item over
different quantity bands for each fiscal year—and the automatic summation of all of the
CLIN columns across all of the fiscal years. This created confusion. It appears that
prospective offerors directed at least three questions to the MCSC in the question-and-answer
period relating to both the summation of the pricing data and the role of an evaluated quantity
in the evaluation scheme. See AR 759-60, 769, 774-75. In question 31 an offeror stated,
“In reference to attachment 5, the calculations in each row of Column Z of CLINs 0001 thru
[sic] 0004 does [sic] not match the heading. Please Clarify.” Id. at 759-60. The agency
responded that “[e]ach row of column Z should be calculated as the heading indicates.
Delete ‘/20’ from the calculation in each row of column z . . . .” Id. Column Z’s heading
reads “Summation of Columns ‘E’ thru [sic] ‘X,’” with column E being the first column with
pricing data for each item in it and column X being the last. See e.g., id. at 586. As a result
of this response, question 77 queried, as follows:
Per Attachment 4, Evaluation, Price, the offeror is informed that the
government will calculate an evaluated price for each proposal by adding
together each CLIN against an evaluated quantity. The offeror is further
informed that the evaluated price formula will be based on the total prices in
FY11-FY15 (columns E through X) for each CLIN (as calculated in column
Z). Separately, in response to a question, the government has stated that the
Attachment 2 quantities are notional only and that the formula in Column Z
should delete the “/20” portion of the formula. This seems to imply that the
evaluated quantity will be 20 units for each and every item. Please confirm
that this is the case, and if not, what is the evaluated quantity that the
government intends to use for each item in each CLIN?
Id. at 769. The MCSC responded, as follows:
Yes. The Procurement Plan in Attachment 2 is notional only. . . . As the
instructions of Attachment 5 indicate: Populate columns “E” thru [sic] “Y” of
the tab[s] . . . . Price information presented by the offeror will be evaluated for
reasonableness. The Government will calculate an evaluated price for each
Offeror’s proposal by adding together all contract line item numbers (CLINs)
22
against an evaluated quantity. The total evaluated price equates to the pricing
of the CLINs presented herein.
Id. Aside from illustrating the dangers of inviting an answer to a compound question, the
MCSC’s answer indicates that an evaluated quantity will be used and that the MCSC will
apply that number in evaluating each offeror’s proposal.
Because this issue was important, and the agency was less than clear as to the exact
method that the MCSC would be using to evaluate offerors’ price proposals, an offeror tried
one final time in question 100 to elicit a meaningful response from the MCSC. Question 100
reads, as follows:
The government has stated in several places that “the evaluated price formula
is based on the total prices in FY11 to FY15 (adding columns E through X)”
and that it will be based on “adding together all CLINS against an evaluated
quantity[.]” These answers along with the structure of the spreadsheet seem
to imply that the evaluated quantity is 1 each for every system and component
. . . . What is the evaluated quantity that the government will use to determine
total evaluated price?
Id. at 774-75. In response the MCSC merely parroted back the instruction in the Solicitation
that offerors were to fill in the pricing information and that “[t]he Government will calculate
an evaluated price for each Offeror’s proposal by adding together all . . . CLINs . . . against
an evaluated quantity.” Id. at 774.
Based on these responses, this court is not convinced that “[t]he process was
transparent” nor that the term “evaluated quantity” was patently ambiguous. See Def.’s Br.
filed Jan. 20, 2012, No. 82, at 12. Instead, the most natural reading of the Solicitation’s
instruction and the MCSC’s answers is that the agency was unwilling to impart the exact
quantity that would be used as the “evaluated quantity,” but that some quantity would be used
in rating the offerors’ proposals. Given the plausible explanation for the MCSC’s opaque
answers, it is likely that, had plaintiff filed a pre-award bid protest, the Government would
have been able successfully to defend against it because the use of an evaluated quantity
would be viewed as a reasonable means of evaluating the offerors’ proposals.
Defendant mistakenly analogizes the present challenge to the one presented in Blue
& Gold. Although plaintiff has stated that “[t]his method does not establish whether one
offeror’s proposal would be more or less costly than another’s,” Pl.’s Br. filed Dec. 22, 2011,
at 32, plaintiff is not challenging the methodology used by the MCSC. Instead, plaintiff
adequately has established that it is challenging only the failure of the MCSC to follow the
framework set forth in the Solicitation. See Pl.’s Br. filed Jan. 13, 2012, at 19-23. This court
23
agrees that plaintiff “is not suggesting that some other evaluation method should have been
performed or that the stated approach to use an evaluated quantity was in itself not proper.”
Id. at 21. Therefore, plaintiff has not waived its pricing challenge.
Having found that plaintiff has not waived its challenge to the pricing evaluation
issue, this court now must determine if the agency’s action was reasonable. The court’s role
in a bid protest, including ascertaining the existence of a rational basis, is not to substitute
its judgment for that of the agency; indeed, the agency generally is accorded wide discretion
in evaluating bids. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416
(1971) (stating a court should not “substitute its judgment for that of the agency”); CHE
Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed. Cir. 2008); Grumman Data Sys.
Corp. v. Widnall, 15 F.3d 1044, 1046 (Fed. Cir. 1994); see also Camp v. Pitts, 411 U.S. 138,
142-43 (1973) (holding that courts should review agency record to determine if agency’s
decision is supported by rational basis). An agency’s decision will be upheld even if the
court might have applied the procurement regulations in a different fashion had the court
been in the agency’s position. See Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed.
Cir. 1989) (citing M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971));
Lumetra v. United States, 84 Fed. Cl. 542, 549 (2008) (“[T]he court ‘will not second guess
the minutiae of the procurement process in such matters as technical ratings and the timing
of various steps in the procurement.’” (quoting E.W. Bliss Co. v. United States, 77 F.3d 445,
449 (Fed. Cir. 1996))). Instead, under the “‘highly deferential’ rational basis review,”
Savantage Fin. Servs., Inc. v. United States, 595 F.3d 1282, 1286 (Fed. Cir. 2010) (quoting
CHE Consulting, 552 F.3d at 1354), the court “must sustain an agency action unless the
action does not ‘evince[] rational reasoning and consideration of relevant factors,’” id.
(alteration in original) (quoting Advanced Data Concepts, 216 F.3d at 1058).
Defendant attempts to bolster its position that “the Marine Corps did not deviate”
from the Solicitation’s framework. See Def.’s Br. filed Jan. 6, 2012, at 31-33. Most notably,
defendant contends that the MCSC did use an evaluated quantity, and that evaluated quantity
was twenty units. 12/ Id. at 33. According to defendant, “the spreadsheet automatically
12/ Defendant also illustrates how the entire price evaluation process was conducted,
and how, when considering the methodology of the evaluation in toto—i.e., including the
weighting step for the different CLINS—the MCSC’s evaluation scheme produced a
reasonable result given the nature of the contract. See Def.’s Br. filed Jan. 6, 2012, at 33-35.
This court is interested only in plaintiff’s challenge that the MCSC failed to utilize an
evaluated quantity—a question that requires a finding as to whether the MCSC followed a
methodology explicitly set forth in the Solicitation. Whether or not the overall effect of the
MCSC’s denominated price evaluation produced a reasonable result is beyond the purview
of this challenge and would have been more appropriately considered in a Blue & Gold-type
challenge. Therefore, the court does not address the other steps that the MCSC used in
24
summed the prices of one unit for each fiscal year at each quantity range, resulting in a price
for an ‘evaluated quantity’ of 20 units.” Id. at 32. Defendant reasons that, because “each cell
[in the spreadsheet] contained a price for . . . one unit,” the summation of the twenty in-line
cells across the four quantity bands for the five fiscal years for each item did amount to an
evaluated quantity of twenty units. Def.’s Br. filed Jan. 20, 2012, No. 82, at 11. The MCSC
used the results returned by the spreadsheet in evaluating the proposals for price, so it
followed the framework established by the Solicitation.
Defendant’s contortions to align the evaluation performed by the MCSC with the
language of the Solicitation stretch the plain meaning of “evaluated quantity” too far to allow
this court to concur with its position. Plaintiff has articulated a far more persuasive position
on the meaning of evaluated quantity, see Pl.’s Br. filed Jan. 13, 2012, at 21-22, and it is clear
from the administrative record that, not only was twenty not the evaluated quantity used by
the Corps, but also that the MCSC did not use any evaluated quantity to evaluate the offerors’
proposals.
The term “evaluated quantity” must refer to a specific number of items that the MCSC
hypothetically would purchase. It is undeniable that each cell contained a price-per-unit
quote for an item should the MCSC place an order within that particular quantity band.
However, the proposition that each cell then represented one “unit” is misguided. It is
possible to order only a single unit from the first quantity band—the 1-10 unit band. In order
to obtain the price quoted in the other quantity bands, the MCSC must assume that it is
purchasing the requisite number of items that correspond to that particular quantity band. For
example, if the MCSC actually used twenty units as the evaluated quantity, then the MCSC
could have considered only the price quotes in the 11-50 quantity band in evaluating the
proposals. The MCSC did not do this.
The Solicitation further implies that the evaluated quantity would be applied over the
entire duration of the contract. In that case if twenty was the evaluated quantity, then the
MCSC would only be purchasing four units per fiscal year, and the correct quantity band to
evaluate each offeror’s proposal would be the 1-10 band. Defendant has not even attempted
to argue that the agency performed this calculation. Moreover, it is not possible for the
MCSC to order a single unit from each quantity band because the prices established for each
band assume that the MCSC is ordering a quantity of items within only that band; stated
another way, the Government cannot purchase twenty units and pay a different price for each
12/ (Cont’d from page 24.)
evaluating the proposals or gauge the reasonableness of what the agency intended to
evaluate.
25
unit. Therefore, not only did the MCSC not use an evaluated quantity of twenty units, neither
did it use an evaluated quantity of one unit.
This court concurs with defendant’s arguments as to why simply picking one number
of items as a sample order to evaluate cost is probably insufficient to fully assess the costs
to the MCSC of a wide range of potential orders when the exact number of items to be
ordered under a contract is unknown. See Def.’s Br. filed Jan. 20, 2012, No. 82, at 12.
According to defendant, “[u]nder the actual pricing evaluation, the Marine Corps calculated
a price that reflected all quantity ranges to ensure that, regardless of how many items the
Marine Corps ordered, it would receive the best overall price.” Id. This suggests to the court
that what the MCSC actually was seeking was an average price per unit that encompassed
all quantity bands; essentially, the MCSC sought an average price that it would be charged
regardless of the quantity ordered. While this seems like a reasonable approach, the court
strongly doubts that the method envisioned by the MCSC would have accomplished this
objective sufficiently because the different quantity bands required the agency to use a
weighted average—rather than a straight average—to accurately assess the prices proposed
by the offerors. 13/ Regardless, plaintiff is not pressing a challenge to the pricing
13/ The reason that a weighted average is necessary is that the quantity bands alter
the effects of different prices at different quantity levels. Consider the following chart:
FY2011 price data for one item (in dollars)
Quantity 1-10
Quantity 1150
Quantity 51100
Quantity 101+
Total
Price
Average
Price per
Unit
Offeror A
10
10
10
10
40
10
Offeror B
20
15
10
5
50
12.5
According to the methodology endorsed by defendant, it would appear that Offeror A is
proposing the best price to the Government. However, this does not accurately take into
account the different quantities that need be purchased to obtain those prices. For example,
were the Government to order five items, Offeror A would charge $50.00 and Offeror B
would charge $100.00. The overall cost to the Government is higher with Offeror B.
However, should the Government order 105 items, Offeror A charges $10,500.00 whereas
Offeror B charges only $525.00. Should the Government truly have no specific quantity in
mind, it would appear that Offeror B actually might be the more attractive choice simply
because of the savings offered to the Government for higher-quantity purchases due to
economies of scale. While the Government pays $50.00 more on a purchase of five items
from Offeror B, it saves $525.00 on the larger order. While Offeror A might be less
expensive in lower quantity ranges, the exact same percentage difference at the higher
26
methodology, and the court only considers whether or not the MCSC performed its stated
tasks.
The MCSC ultimately is bound by the language of the Solicitation, which clearly
stated that it would compare offerors’ prices “against an evaluated quantity.” See AR 367.
It might have been most reasonable for the MCSC to select an evaluated quantity from each
of the different quantity bands to evaluate the effects of the economies of scale that each
offeror potentially could offer. However, that is not what was stated in the Solicitation.
What was stated was that the MCSC would use an evaluated quantity against which it would
compare the offerors’ prices. This it did not do. 14/ Therefore, the court finds that the
MCSC acted irrationally and unreasonably by failing to follow the evaluation procedure
established by the Solicitation.
Further, the court finds that this unreasonable departure prejudiced to plaintiff. As
illustrated by the chart in footnote 12, the evaluation actually used by the MCSC can lead to
skewed (and strategic) pricing by offerors that does not accurately reflect their costs per item.
Referring to the chart, it can be assumed that Offeror A proposed its prices envisioning the
simple summation used by the agency, whereas Offeror B—a representation of plaintiff in
this hypothetical—followed the Solicitation’s instructions and made accurate predictions as
to prices at particular quantity ranges. According to the evaluation performed, Offeror A
receives a higher rating. However, Offeror A very well could have received a lower rating
had the agency performed as it said it would and compared the proposals against an evaluated
quantity. Thus, the resulting harm to an offeror whose proposal was not fairly considered
due to the departure from the Solicitation’s framework constitutes sufficient prejudice for
this court to find that plaintiff has succeeded on its merits challenge to the MCSC’s price
evaluation of the proposals.
13/ (Cont’d from page 26.)
quantity ranges is magnified because of the number of items that are ordered at that price.
This example further illustrates why it is important to consider the quantity bands when
examining the unit prices: the differences in the quantities ordered at each range magnify
differences in an offeror’s proposed prices.
14/ Defendant states that its announced weighting of 20 percent for component
CLINs 2 and 4 and 80 percent for system CLINS 1 and 3 allowed for the weighting of
evaluated prices. See Def.’s Br. filed Jan. 6, 2012, at 32. However, the court understood that
the respective percentages weighted the likelihood that the more expensive systems would
be ordered.
27
VI. Other factors warranting injunctive relief
Intervenor’s continued performance on the illegally awarded contract will cause
plaintiff irreparable harm in the form of economic loss and monetary damages for lost profits.
Recovery of bid and proposal costs would do little, if anything, to compensate for the loss.
In balancing the relative harms, the court recognizes that the MCSC knew about the
issues resulting from intervenor’s representations regarding [
] before it permitted
performance of Delivery Order 0001 to resume after December 1, 2011. Accordingly,
defendant and intervenor readily assumed the risk of harm that they could sustain if a
permanent injunction were granted—a risk that this court explicitly warned about during the
status conference held on December 7, 2011. See Tr. at 30-35. The question discussed with
the parties was whether plaintiff should move for interim injunctive relief now that the
MCSC intended to proceed with its reduced procurement needs ($30 million versus $47
million), or whether the court should proceed with the parties’ schedule whereby plaintiff’s
right to an injunction would be resolved by late January 2012. Defendant preferred the latter,
although plaintiff was prepared to amend its complaint and move forward. The court advised
that national security concerns in the then-$30 million order likely would prevail during the
six-week window. The court continued that, were plaintiff ultimately to prevail on the
merits, the Government could not argue that the additional time for final resolution
aggravated the prejudice caused by an additional delay.
Given this advance warning, the magnitude of the harm to the Government is reduced.
However, the court will address defendant’s argument that there would be no harm to GTA
if the court were to withhold an injunction, given the corrective action taken by the MCSC.
According to defendant, given that the MCSC already has addressed plaintiff’s complaints
by delimiting the original award to only a tenth of the original contract amount and has
structured what remains around those harms most bothersome to plaintiff, there can be no
harm to plaintiff in allowing the small portion of the remaining contract to be performed
uninhibited.
Although this argument has pragmatic merit, the court finds that ultimately there
would be more harm to plaintiff than to the Government if performance of the twice revised
Delivery Order 0001, which was issued under the subject contract, were allowed to continue.
The obvious harm that plaintiff suffers should an injunction not issue is the loss of business
by not having the opportunity to fill the MCSC’s order. Essentially, plaintiff loses out on the
opportunity to perform for the $9.9 million. Defendant has argued that the corrective action
taken by the MCSC has removed whatever harm a tainted proposal may have caused. As
argued by defendant, revised Delivery Order 0001 “does not implicate the evaluation
process” because the decision to make the covered limited purchases was based solely on the
Marine Corps’s “critical military need.” Def.’s Br. filed Jan. 20, 2012, No. 81, at 3.
28
Defendant argues that “[a]ny alleged injury to [plaintiff] is one-step removed from the award
decision, and thus not traceable to it, because the agency did not rely upon the award decision
to cause the alleged harm.” Id. at 4. Thus, defendant concludes that the “corrective action
places [plaintiff] in the same position as all other offerors.” Def.’s Br. filed Dec. 20, 2011,
at 8.
This is not an accurate summation of plaintiff’s position. At bottom, the harm to
plaintiff stems from the MCSC’s failure to consider intervenor’s misrepresentation and
noncompliance with a statutory requirement. Although the MCSC has taken corrective
action to eliminate reliance on those specific parts of intervenor’s proposal on which the
MCSC relied, this surgical correction does not place plaintiff in the same position as other
offerors. Instead, the MCSC is still relying on intervenor’s misrepresentation because
intervenor was the contractor awarded revised Delivery Order 0001—a position that it
obtained as a result of its misrepresentation. Put another way, the MCSC rated intervenor
as most qualified based on a proposal containing a material misrepresentation, and, although
the MCSC might be viewed as having nominally canceled that contract award, when looking
for a contractor to fulfill its “critical military need,” the MCSC simply selected the offeror
it had just ranked most qualified on that canceled Solicitation to fill the Delivery Order.
Thus, intervenor is still benefitting from its material misrepresentation in a way that is
prejudicial to plaintiff which has a right to assume that the procurement process will be
followed. The harm to plaintiff is that one of its competitors currently is benefitting from its
misuse of the procurement system; plaintiff has a right to lawful adherence to the
procurement system and is harmed by a denial of a fair opportunity to compete. In this
particular case, this magnitude of harm should an injunction not issue outweighs the harm
to the Government—a slightly prolonged procurement timeline and the administrative costs
of correctly adhering to procurement law—that would result from the issuance of an
injunction.
Finally, the court must consider the effect—if any—of an injunction on the public
interest. National defense and national security concerns will be considered in tandem with
concerns for the public interest and the integrity of the procurement system. In this regard
the court takes into account applicable procurement regulations, including SBA regulations.
Notably, the SBA’s size determination appears to require termination of intervenor’s current
contract. The public interest favors requiring the Government to follow its procurement
regulations. See Sys. Application & Techs., Inc. v. United States, 100 Fed. Cl. 687, 721-22
(2011). Given the SBA’s determination and the fact that the MCSC has continued its
contract with intervenor, it is apparent that an injunction halting performance actually would
promote the public interest.
29
VII. “Due regard to the interests of national security”
The final issue governing injunctive relief—determining that the grant of an
injunction serves the public interest—implicates 28 U.S.C. § 1491(b)(3), which provides
that, in exercising its bid-protest jurisdiction, “the court[] shall give due regard to the
interests of national defense and national security and the need for expeditious resolution of
the action.” See also Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 702 (2010)
(“[W]hen military and national security interests are implicated, the public interest factor
gains ‘inflated’ importance in the court's balancing of the equities.” (citation omitted)).
Nonetheless, when the Government makes a claim of national security, as it has done in this
protest, a “‘[c]ourt will not blindly accede to such claim[].’” Gentex Corp. v. United States,
58 Fed. Cl. 634, 655 (2003) (quoting Harris Corp. v. United States, 628 F. Supp. 813, 822
n.13 (D.D.C. 1986)). It must, however, give the claim “the most careful consideration,” id.,
while evaluating it “with the same analytical rigor as other allegations of potential harm to
parties or the public.” Id. (citation omitted).
Defendant’s interpretation of § 1491(b)(3)’s admonition, as elaborated upon during
argument, is that the MCSC has tailored its procurement needs in Defendant’s Notice of
Additional Corrective Action to take account of critical and minimal military needs. The
problem with this approach is that the Government is seeking to equate “due regard” to
abstention from consideration. In other words, defendant reasons that, because the MCSC
has taken ongoing corrective action to delimit this procurement to its absolute minimum in
terms of exigent need, the “corrected” scope of procurement should proceed. Defendant
explained in its most recent brief:
The Marine Corps should have included those items in its termination action
of December 15, 2011, because it intended for the termination to encompass
all of the awarded contract that did not depend upon a military need for which
there is not an alternative contract vehicle. With this additional termination
action, the order for critical items includes only the fuel systems: the Tactical
Airfield Fuel Dispensing System, the Amphibious Assault Fuel System, and
the Expeditionary Refueling System. Those systems cost approximately
$9,927,614.00. This should have been the order from the start.
Def.’s Br. filed Jan. 20, 2012, No. 82, at 16 (emphasis added). And, defendant might add,
plaintiff has been wasting its time ever since the start, given this outcome. Defendant
candidly expressed during argument that, without admitting error, the MCSC “has tailored
an injunction on itself.”
This position is one step away from the argument that the Government advocated
recently in Ceradyne, Inc. v. United States, No. 11-725C, 2011 WL 7069611 (Fed. Cl. Dec.
30
22, 2011). According to Judge Firestone, the Government argued that “the court has
discretion to voluntarily refrain from exercising jurisdiction over this matter, regardless of
any other facts at issue in the merits.” Id. at *12 n.8. The protester in Ceradyne countered,
according to the judge, that “such concerns are only properly raised in the context of
evaluating whether or not to grant injunctive relief to a successful claimant.” Id. Judge
Firestone did not reach the issue, but this court must and holds that the jurisdictional statute
states in as plain English as Congress ever proffers that the interests of national defense and
national security must be accorded due regard in determining whether to award injunctive
relief.
This court cannot emphasize more forcefully that no court, least of all this jurist,
presumes to dictate to the Marine Corps its assessment of military needs—whether in
equipping itself to respond to contingencies or to exigent circumstances in actual theaters of
war. What the Court of Federal Claims should accomplish, however, is an evaluation of a
protester’s arguments that the showing should be found wanting, and the court proceeds to
do so.
The Macecevic Declaration does not justify withholding injunctive relief for two
reasons: First, it does not explore available alternatives other than “[s]cavenging [for] parts”
or procuring through the DLA, which would mean “up to twice as long till delivery.”
Macecevic Decl. ¶ 11. Other alternatives do exist. Fundamentally, the MCSC wants to
procure competitively and fulfill its needs under the competitive contract that formed the
basis of Delivery Order 0001. See Def.’s Br. filed Jan. 20, 2012, No. 81, at 6-7 (“[T]he
Marine Corps did much more than that [i.e., investigate a sole-source award] by using the
competitive process.”).
Second, the MCSC acknowledges that other procurement vehicles, such as a solesource contact, are available; it just does not want to use them because it is fostering the
goals of competition by proceeding on a limited basis with an awardee that would not be in
that position absent a material misrepresentation. On this record the interests of national
defense and national security do not prevail over upholding the integrity of the procurement
process to redress a material misrepresentation. The MCSC’s preference for a particular
procurement scheme is not the same as demonstrating a necessary contractual instrument.
Defendant has noted the MCSC’s concerns about plaintiff’s ability to perform the contract,
but the relief awarded does not mandate that the MCSC procure the three systems from
plaintiff. The scope of the injunction prevents fulfilling these particular needs through
intervenor and nothing more.
In terms of timing, plaintiff cannot be faulted for delaying the award or delivery of the
items sought by the Solicitation. The record supports a finding that plaintiff has not been
dilatory. In fact, when the court discussed with the parties on December 7, 2011, whether
31
it would issue a preliminary injunction if plaintiff moved for one to halt the procurement of
the $30-million order from intervenor, the court put defendant and the MCSC on notice that
it would not entertain a complaint of delay or more aggravated exigent circumstances when
briefing, argument, and decision on a consolidated proceeding for preliminary and permanent
injunctive relief were scheduled to be completed by late January 2012. See Tr. at 30-35. It
is true that plaintiff never moved for preliminary injunctive relief, but, given the rapid and
changing developments in this case, including two corrective actions and a retrench from a
$47-million procurement to $30 million and then to $9.9 million, all involving different
items, plaintiff was in no position to move until the SBA confirmed that intervenor did not
qualify to supply a number of components under the Solicitation. When plaintiff came into
court, it faced Mr. Macecevic’s declaration, which was based on a $30-million draft order
for “[e]ssential components and systems with critical deficiencies as of 30 November 2011.
This order represents the minimum quantity necessary to achieve satisfactory material
readiness for combat units.” Macecevic Decl. Ex. 2. (The order had been placed on
December 1, 2011, calling for delivery on April 29, 2012, according to defendant’s
representations during oral argument.)
Faced with that showing and the imminence of resolving the matter on a yet-to-bebriefed record to be supplemented by the documents submitted to, and generated by, the
SBA, the court advised that it would not be inclined to grant a preliminary injunction.
Therefore, the attempts by both defendant and intervenor to use plaintiff’s “failure” to move
for preliminary injunctive relief as evidence that plaintiff has not been diligent in pursuing
this protest are not looked upon favorably. In fact, given the court’s statements to the parties,
plaintiff’s forgoing the right to move for a preliminary injunction and its advocating an even
more expedited briefing schedule on the merits actually weigh in favor of a finding that
plaintiff has been doing everything possible to advance its protest to a final decision as
quickly as possible—the exact opposite of defendant’s and intervenor’s contentions.
What occurred in the interim, according to defendant, was that the MCSC issued its
order for the $9.9-million truncated procurement as of January 23, 2012, when it canceled
that part of Delivery Order 0001 covering components. Defendant insists that the MCSC did
not issue a new or revised order; it merely modified the prior order that had been placed on
the competitively awarded contract. Therefore, in this particular case, national defense
interests should not obviate the defective award.
CONCLUSION
Accordingly, based on the foregoing,
1. Defendant’s motion to dismiss is denied.
32
2. Plaintiff’s cross-motion for judgment on the administrative record is granted, and
defendant’s and intervenor’s cross-motions for judgment on the administrative record are
denied.
3. Defendant, through the Marine Corps Systems Command, its officers, agents,
employees, and all other persons acting in connection therewith shall not proceed with
performance of Delivery Order 0001 issued under Contract M67854-11-D-5030 awarded
under Solicitation No. M67854-11-R-5030 on July 6, 2011, to J.G.B. Enterprises, Inc., and
the contracting officer shall direct J.G.B. to cease performance thereunder.
4. The Clerk of the Court shall enter judgment declaring the award to intervenor to
be unlawful and enjoining performance under Delivery Order 0001 consistent with the
foregoing.
5. By February 17, 2012, the parties shall identify by brackets any material subject
to redaction before the order issues for publication.
IT IS SO ORDERED.
/s/ Christine O.C. Miller
________________________________
Christine Odell Cook Miller
Judge
33
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