MARY ELLEN COSTER WILLIAMS, Judge.
In this post-award bid protest, Afghan American Army Services Corporation ("AAA") challenges its nonresponsibility determination and exclusion from the competition in the National Afghan Trucking ("NAT") multiple-award procurement for trucking services in Afghanistan. The Army disqualified AAA from receiving an award on the ground that AAA was nonresponsible, a determination AAA seeks to overturn as arbitrary and capricious. AAA also claims that the Army applied unequal and heightened responsibility requirements to AAA as compared to Anham LLC ("Anham"), a contractor that was deemed responsible and awarded a NAT contract. AAA seeks a permanent injunction remanding its responsibility determination to the Army for a reevaluation.
This matter comes before the Court on the parties' cross-motions for judgment on the administrative record ("AR") and Plaintiff's request for a permanent injunction.
On February 22, 2011, the Army issued solicitation number W91B4N-11-R-5000 for NAT services in Afghanistan. The purpose of the NAT contract was to provide a secure and reliable means of distributing reconstruction material, security equipment, fuel, miscellaneous dry cargo, and life support assets to forward operating bases and distribution sites throughout the combined joint operations area in Afghanistan. The Army anticipated the award of indefinite delivery/indefinite quantity contracts for trucking services in three suites: Suite 1 for bulk fuel, Suite 2 for dry cargo, and Suite 3 for heavy cargo. AR 393. The NAT procurement was essentially a follow-on procurement to the prior Host Nation Trucking ("HNT") contract, which had covered substantially the same mission requirements. The Army awarded NAT contracts to 20 contractors, none of whom were HNT contractors.
The solicitation stated that the Army would make awards based on Federal Acquisition Regulation ("FAR") 15.101-2, "lowest price technically acceptable."
To be determined responsible, a prospective contractor must—
AAA timely submitted its proposal on April 8, 2011, for all three NAT suites.
In a subsequent letter, the contracting officer informed AAA of an additional area of concern regarding AAA's performance on the HNT contract — an alleged instance of bribery involving an email allegedly sent by AAA's CEO appearing to offer payment to government officials in return for a contract award.
On August 2, 2011, AAA responded to the contracting officer's notice of the ongoing responsibility evaluation, detailing the relevant circumstances, mitigating factors, and corrective action taken or proposed to be taken with respect to each area of concern raised by the contracting officer. AR 995-1009. On August 3, 2011, AAA also responded to the contracting officer's letter notifying AAA of the allegation that AAA's CEO had proposed to bribe government officials in an email. AR 1105-07. In a declaration attached to AAA's response, AAA's CEO denied ever offering a bribe in exchange for contract award. AR 1131-32.
On August 9, 2011, Army contracting officer Salia J. Price found that AAA was nonresponsible, relying on AAA's performance of the HNT contract, corrective action taken by AAA, and her assessment of AAA's responsibility for each requirement enumerated in FAR 9.104. AR 1154-62.
Applying the individual sections of FAR 9.104-1, the contracting officer first determined that AAA did not meet the requirements of FAR 9.104-1(b), which provides that the prospective contractor must "[b]e able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments." The contracting officer stated:
AR 1156.
The contracting officer also found that AAA did not satisfy the requirements of FAR 9.104-1(c), which requires prospective contractors to "[h]ave a satisfactory performance record." The contracting officer stated:
AR 1157.
Additionally, the contracting officer found that, for several reasons, AAA did not satisfy FAR 9.104-1(d)'s requirement that the prospective contractor "[h]ave a satisfactory record of integrity and business ethics." AR 1157-59. First, the contracting officer noted that AAA had received four letters of concern and a cure notice regarding noncompliance with requirements for use of ITV devices. AR 1157-58. "ITV" refers to a tracking system that monitors a vehicle through a satellite-based GPS device attached to the vehicle itself.
In AAA's determination of nonresponsibility, the contracting officer stated that the Army had notified AAA of its failure to comply with the contract's ITV utilization rate requirement. AR 1157-58. The contracting officer also noted that "[d]espite AAA's proposed corrective actions to address this area of concern including review of its Quality Control Plan, plans to repair or replace inoperable ITV's, adjusting internal staffing and training of ITV, these proposed actions did not prevent reoccurrence." AR 1158.
Second, the contracting officer found that AAA lacked business ethics and integrity due to transponder stacking. The contracting officer cited a March 1, 2011 letter stating that AAA had engaged in transponder stacking. AR 1158. According to the contracting officer, "AAA's. . . implementation of corrective actions . . . did not prevent reoccurrence of transponder stacking months later which led to the issuance of the 2 Jul 2011 Cure Notice."
Third, the contracting officer noted that "[a] total amount of $2,971,786.10 has been withheld for a combination of failed missions, Cancelled No Pay Missions, Pilferage/ Backcharges and Fuel Backcharges under [the HNT contract], of which $2,757,586.10 is specifically attributed to AAA's performance failures."
Fourth, the contracting officer noted that there had been reoccurring submissions of forged TMRs under the HNT contract and that AAA had been referred for proposed debarment based on "numerous acts of criminal misconduct such as forgery and false claims. . . ." AR 1159. The responsibility determination further stated that AAA's implementation of corrective plans did not prevent the repeated offenses over the last two years.
The referral for proposed debarment, dated July 13, 2011, referenced an allegation that AAA had forged TMRs during its performance of the HNT contract. AR 1224-27. The referral based the forgery allegation on affidavits from soldiers and civilians in Afghanistan claiming receipt of fictitiously executed TMRs. AR 1230. The referral for proposed debarment contained the following paragraph under the heading "Nature of potential fraud:"
AR 1225. The referral further stated:
AR 1226.
The referral for debarment referenced the "Interim Criminal Investigation (CID) Report of Investigation dated 8 April 2011," which is included in the AR. AR 1224. The CID report stated:
AR 1230.
In determining AAA nonresponsible for lacking a satisfactory record of integrity and business ethics, the contracting officer found:
AR 1159.
The contracting officer also stated in the responsibility determination that she had notified AAA by letter dated July 30, 2011, of adverse information regarding AAA's performance of its HNT contract, including "reoccurring instances of [reported] submission of forged Transportation Movement Requests (TMRs) . . . throughout the life of the contract." AR 1155-56. In her letter dated July 30, 2011, the contracting officer requested further information from AAA regarding the forged TMRs.
AR 1008. AAA sought clarification from the contracting officer and requested "any details or other information regarding [the allegations]" so that it could "undertake an appropriate investigation."
Finally, in her responsibility determination, the contracting officer detailed an allegation of bribery arising from the HNT contracting officer's receipt of an email proposing to offer a bribe in exchange for contract award that appeared to have been sent from the email address of AAA's CEO. AR 1159. AAA's CEO denied ever offering a bribe in exchange for a contract. AR 1105-32. In a declaration submitted in response to the contracting officer's August 2, 2011 letter, the CEO claimed that his commercial email account had been compromised and that the offer of a bribe was sent by an unauthorized user of the account. AR 1131-32. The contracting officer found that AAA lacked business ethics and integrity, however, because AAA's CEO had not subsequently changed his email address as a means to prevent future unauthorized access. AR 1159.
The contracting officer also found that AAA did not "[h]ave the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them" as required by FAR 9.104-1(e). AR 1159. In support of this conclusion, the contracting officer reiterated AAA's history of noncompliance with PSC requirements and failure to "improve GDMS utilization rates," which resulted in the issuance of four letters of concern to AAA. AR 1160. Additionally, the contracting officer referred to a May 2010 letter of concern "citing that the Government made repeated attempts to contact AAA's Operation Center via phone and email that were unsuccessful and fourteen (14) trucks failed to arrive at mission origination points." AR 1159-60. In conclusion, the contracting officer stated: "All of these examples are indicative of a lack of quality assurance and operational controls. Further, AAA's lack of compliance with PSC arming requirements does not provide the Government confidence in AAA's safety programs." AR 1160.
Like AAA, Anham provided trucking services in Afghanistan under the HNT contract. AAA 2. In 2011, Anham submitted a proposal for Suites 2 and 3 of the NAT contract. AR 25058-267. Initially, Anham was excluded from the competitive range because its proposal failed to meet the solicitation's technical requirements. Consequently, the contracting officer did not initially make a responsibility determination for Anham.
On September 30, 2011, Anham filed suit in this Court challenging its exclusion from the competitive range in the NAT procurement. Subsequently, Anham entered into a settlement agreement with the Government, and the parties stipulated to the dismissal of Anham's suit.
On June 18, 2012, the Court granted AAA leave to amend its pleadings to include allegations that the contracting officer had engaged in disparate treatment by deeming AAA nonresponsible and Anham responsible. On June 25, 2012, the Government filed an amended AR, containing both classified and nonclassified material. On July 26, 2012, Plaintiff filed a motion for judgment on the amended AR and a classified appendix addressing disparate treatment. Defendant filed a response to Plaintiff's motion and a classified appendix on August 9, 2012. The parties completed supplemental briefing regarding Plaintiff's disparate treatment allegations on August 21, 2012.
The Court has jurisdiction over this bid protest pursuant to the Tucker Act, 28 U.S.C. § 1491(b)(1) (2006). In a bid protest, the Court reviews an agency's procurement decision under the standards enunciated in the Administrative Procedure Act ("APA"), 5 U.S.C. § 706 (2006). 28 U.S.C. § 1491(b)(4) (2006);
An agency action is arbitrary and capricious when the agency "`entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or [the decision] is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.'"
"Contracting officers are afforded considerable discretion in negotiated procurements, such as this one, where award is premised on a `best value' determination."
In resolving bid protests, the trial court is to make findings of fact weighing the evidence in the AR.
AAA seeks leave to supplement the AR with several documents relating to the termination of its proposed debarment — the decision of the Army Suspension and Debarment Officer ("SDO") terminating the proposed debarment, AAA's Response to the Notice of Proposed Debarment, its slide presentation to the SDO, and documents cited in its Response to Notice of Proposed Debarment.
As the United States Court of Appeals for the Federal Circuit recognized in
In her responsibility determination, the contracting officer cited AAA's referral for proposed debarment based upon allegations that it had forged TMRs during performance of the HNT contract as one reason for her conclusion that AAA lacked integrity and business ethics. AR 1159. During performance of the HNT contract, AAA had never been notified of allegations of forged TMRs. AR 1008. It was only when AAA received the contracting officer's letter notifying AAA of the ongoing NAT responsibility evaluation, that AAA became aware of these forgery allegations.
On September 22, 2011, over a month after AAA had been found nonresponsible for the NAT procurement, the SDO notified AAA that it was being proposed for debarment based upon allegations of forged TMRs. Def.'s Mot. for J. upon the Admin. R. App. 1. After AAA received details of the allegations in the debarment proceeding, AAA responded that the sworn statements relied upon by the Army to allege forgery were unsupported and inaccurate. Pl.'s Reply Ex. 2. AAA submitted that it had performed the missions relating to the TMRs in question and provided verified copies of the TMRs and ITV "snapshots" indicating that its convoy movement was accurately reflected by the TMRs. Pl.'s Reply Exs. 2, 3.
On February 29, 2012, the SDO terminated AAA's proposed debarment, and it is this document, along with AAA's submissions to the SDO, that AAA seeks to add to the record. In the decision terminating the proposed debarment, the SDO concluded that "Army records and statements [were] insufficient to prove fraud." Pl.'s Reply Ex. 1, at 6. The SDO explained:
Because the contracting officer relied on the referral for proposed debarment in finding AAA nonresponsible, the Court agrees that the SDO's decision terminating the proposed debarment, as well as AAA's submissions to the SDO, are necessary for effective judicial review. Absent the SDO's decision and AAA's response to the allegations, the record would be erroneous and misleading. Refusing to permit supplementation here would perpetuate error by allowing what the Government admitted was an unsupported allegation to form a predicate for AAA's nonresponsibility determination.
This Court recognizes that admitting a post hoc agency determination into the record in a bid protest is highly unusual. However, in this instance, the post hoc decision is not that of the contracting officer offering a different rationale or new justification for her nonresponsibility determination.
As courts have recognized, post-decisional information correcting erroneous assumptions, predictions, or facts forming the predicate for agency decision-making must be added to the administrative record to permit effective judicial review. In the context of agency rulemaking, the D.C. Circuit has recognized that while "[a] reviewing court must tread cautiously in considering events occurring subsequent to promulgation of a rule . . ., testimony [that] bears directly upon the plausibility of certain predictions made by the Administrator in promulgating the Regulations . . . shall [be] accept[ed] . . . into the record."
In the context of a bid protest, it is particularly appropriate that judicial review be informed by an ancillary final debarment decision where the contracting officer only had the benefit of a preliminary decision. Here, at the time the nonresponsibility determination for AAA was performed, the contracting officer only had the notice of proposed debarment, which represented the initiation of the debarment proceeding, not the final resolution, as the debarment process was still running its course.
AR 1157, 1159 (emphasis added). In light of these statements, the record must be corrected in order to ensure an accurate basis for judicial review.
Although the contracting officer cannot be faulted for not considering what she could not have known — that the Army's Suspension and Debarment Official would conclude that the proposed debarment and allegations of forgery were unsupported — that does not mean that this Court should ignore this significant development in adjudicating this bid protest at this point in time. The fact that the contracting officer did not know the notice of proposed debarment would be withdrawn or that the forgery allegations were unsupported does not mean that this Court must put blinders on and ignore these facts now.
There is another ground for permitting supplementation of the record here. Plaintiff contends that the contracting officer acted arbitrarily and capriciously in failing to afford AAA an opportunity to respond to the forgery allegations in the context of the responsibility assessment, and thus failed to consider "all relevant factors" before forming her final determination with respect to the forged TMRs. As courts have recognized, consideration of evidence not in the record is appropriate "`in order to determine whether the agency considered all of the relevant factors.'"
As such, the proposed debarment materials are necessary for effective judicial review.
In determining AAA nonresponsible for lacking a satisfactory record of integrity and business ethics, the contracting officer found:
AR 1159.
Plaintiff contends that the contracting officer acted unreasonably in concluding that there had been recurring instances of forged TMRs under the HNT contract when 1) there had been no allegations of forgery during AAA's performance of the HNT contract — no cure notices, no letters of concern and no corrective action requested — and 2) AAA denied the allegations and requested details so it could conduct an investigation, but the contracting officer did not grant this request. AR 1008. The Court agrees. This combination of circumstances should have raised a red flag and at least prompted the contracting officer to permit AAA to investigate and to respond to the reported allegations of forgery.
In response to these serious allegations, AAA not only denied the forgeries but asked for clarification so it could investigate and respond in the context of the responsibility determination. Instead of granting AAA's request and obtaining a fuller picture of an anomalous situation, the contracting officer proceeded apace with her nonresponsibility determination and issued that determination just seven days after AAA requested that the Army provide some basis for the forgery allegation. Yet there is nothing in the record to indicate that this nonresponsibility determination had to be made on an expedited basis. The HNT contract was still being performed, and there were a number of other potential awardees for this multiple-award contract. This rush to judgment without obtaining a more complete picture of what transpired was arbitrary and capricious.
Indeed, once the suspension and debarment official considered AAA's position and probed the forgery allegations, a wholly different picture emerged. The SDO, reviewing a more extensive record — including affidavits from Army personnel, additional investigative reports, and material submitted by AAA — found that there was "neither direct nor circumstantial evidence to prove that AAA or any of its employees had actually forged unit signatures on TMRs or filed false claims." Pl.'s Reply Ex. 1, at 6. Statements from Army investigators indicated that 179 TMRs alleged to have been forged by AAA were lost or misplaced by the Army itself.
This Court does not, of course, charge the NAT contracting officer with knowledge she did not have in performing AAA's responsibility assessment. Rather, the Court simply holds that the contracting officer should have obtained additional information given the unusual circumstances — serious allegations of forged TMRs had appeared for the first time in a notice of proposed debarment, yet involved TMRs that the HNT contracting officer had monitored for two years but never brought to AAA's attention.
The Court recognizes that the notice of proposed debarment was supported by a CID investigative report whose author had "obtained copies of sworn statements and forged [TMRs]. . . which had been originated at various military bases throughout Afghanistan." AR 1230. The CID report further stated that AAA had submitted 124 forged TMRs for a total of $3,660,000.
The contracting officer's reliance upon the forgery allegations was arbitrary, capricious, and irrational in another respect. The contracting officer erred in concluding that AAA's "corrective actions" regarding the forgeries had been inadequate when there had been no corrective action implemented in the first place. AAA had never been notified that it had an issue with forgeries, so there was no reason for AAA to initiate corrective action. Thus, the contracting officer's reference to "AAA's implementation of corrective plans" was blatantly incorrect.
Plaintiff has failed to prove, however, that the contracting officer's conclusions in AAA's responsibility determination were arbitrary and capricious with respect to other areas of its HNT contract performance, including ITV utilization rates, failed missions, and improper payment allegations, with the exception of transponder stacking. The Government has conceded that the contracting officer's finding of "reoccurrence" of transponder stacking was an error, unsupported by record evidence.
Although it is difficult to ascertain the extent to which the referral of proposed debarment and alleged forgeries colored the contracting officer's assessment regarding AAA's nonresponsibility, the nonresponsibility determination itself indicates that this referral and the allegations of forgery played a significant role in her ultimate determination. At the conclusion of the responsibility determination, the contracting officer expressly referenced the referral for debarment as a basis for determining that AAA failed to meet the FAR responsibility criteria:
AR 1161 (emphasis added). Importantly, the contracting officer characterized the allegations of forged TMRs and the referral of proposed debarment as a significant issue, stating that "significant negative information was found in relation to subparagraph FAR 9.104-1 . . . (d), and (e)." Subparagraphs (d) and (e) only addressed the forgeries, the so-called "corrective plans," and the notice of proposed debarment — they referenced no other performance issues.
The Court recognizes that the contracting officer identified additional areas of AAA's noncompliance under the HNT contract in her nonresponsibility assessment, including noncompliance with PSC requirements, specifically noncompliance with providing correct and complete armed employee authorization packages and registration in the Synchronized Predeployment Operational Tracker database; persistent failure to comply with ITV utilization requirements; millions of dollars in withheld funds for a combination of failed missions, canceled no-pay missions, pilferage/backcharges, and fuel backcharges; and attempted bribery using AAA's CEO's email address. AR 1154-62. Additionally, the contracting officer referred to a May 2010 letter of concern "citing that the Government made repeated attempts to contact AAA's Operation Center via phone and email that were unsuccessful and fourteen (14) trucks failed to arrive at mission origination points" in her discussion of AAA's performance record pursuant to FAR 9.101-1(e). AR 1159-60. It is not clear from the record whether these other incidents, without consideration of the proposed debarment or alleged forgeries, would have provided a sufficient basis for the contracting officer to find AAA nonresponsible.
Because the contracting officer's erroneous conclusions that AAA forged TMRs, failed to take corrective action, and engaged in reoccurring incidents of transponder stacking, cannot support the nonresponsibility determination, the Court remands the matter to the contracting officer for a reevaluation of AAA's responsibility without regard to these matters. Here, acknowledging subsequent developments will allow the contracting officer on remand to take stock of the Government's own considered decision terminating the proposed debarment. Pragmatic circumstances in the instant procurement mandate this result. AAA, if found responsible at this juncture, would be eligible for an award and could perform the remainder of the contract, which could extend until October 31, 2013.
Plaintiff further alleges that the contracting officer improperly found AAA to be nonresponsible by treating it in an unequal and disparate manner as compared to one other offeror, Anham LLC ("Anham"), another HNT contractor that was deemed responsible. Specifically, AAA contends that although AAA and Anham were similarly situated offerors with nearly identical HNT contract performance problems and comparable responses addressing performance concerns, the NAT contracting officers evaluated AAA and Anham differently with respect to responsibility.
As an initial matter, contracting officers are obligated to treat all offerors equally, "evaluating proposals evenhandedly against common requirements and evaluation criteria."
Plaintiff alleges that the contracting officer's review of AAA's record in several areas of performance on the HNT contract was arbitrary and capricious in light of Anham's determination of responsibility.
Although Plaintiff claims that the Army applied disparate standards when evaluating compliance with private security arming requirements, this allegation fails because Anham complied with the HNT contract's private security arming requirement, while AAA was consistently noncompliant until August 2011.
The Army issued a letter of concern dated February 1, 2010, to all HNT contractors for failure to meet private security arming requirements. AR 25508. Anham responded that it believed it had complied with the contract's private security arming requirements. AR 25509-10. Anham's final responsibility determination noted that "[a]fter discussing the arming authority requirements with the Armed Contractor Oversight Division, Anham was the only HNT contractor to comply with the arming authority clause." AAA 3.
By contrast, AAA was notified on multiple occasions that it had failed to comply with this requirement. After the first letter of concern on February 1, 2010, the Army issued a second letter of concern to AAA on May 14, 2011, and subsequently issued a cure notice to AAA on July 2, 2011. AR 1204, 1185-86. In the cure notice, the contracting officer noted AAA's persistent difficulties with meeting the contract's arming requirements clause, and stated that "this issue still has not been resolved." AR 1185. AAA claimed in its July 11, 2011 reply that "the issue is near resolution." AR 1195. Not until August 2, 2011, close to the September, 2011 end of the HNT contract, did AAA state that it was compliant with this requirement. AR 1003. Based on this evidence, it was reasonable for the contracting officer to conclude in AAA's responsibility determination that (a) AAA had been "notified on three (3) occasions, . . . [and] failed to comply with the Private Security Contractor arming requirements" and (b) that "AAA's lack of compliance with PSC arming requirements does not provide the Government confidence in AAA's safety programs." AR 1157, 1160.
Plaintiff alleges that even though both Anham and AAA increased their ITV utilization over the course of the HNT contract, they were evaluated differently for this concern. The record does not contain complete ITV utilization data for both contractors throughout the period of HNT contract performance. However, the record indicates that near the beginning of HNT contract performance, Anham's average ITV use rate was 60%.
Nonetheless, Plaintiff contends that its ITV utilization improved significantly over the HNT contract. As support for this claim, AAA points to its ITV data for the 13-week period between April 16, 2011, and July 9, 2011. Pl.'s Mot. for J. on the Am. Admin. R. 27. During this period, AAA's ITV utilization rate fluctuated between 72% and 93%. However, for the same period of performance, Anham's ITV usage rates were higher. Anham's ITV utilization rate was 100% for each week in this period, with two exceptions — on June 25, 2011, it was 98.43% and on July 2, 2011, it was 99.55%. AR 1049-61. Moreover, during this period of improved ITV usage, AAA received a cure notice from the Army dated July 2, 2011, stating that "AAA's GDMS utilization is consistently below the 100% utilization rate required in the Statement of Work." AR 1185.
The contracting officer concluded in Anham's responsibility determination that "Anham's use of in transit visibility system greatly improved over the life of the contract and [Anham] was a top performer regarding this metric." AAA 4. In AAA's responsibility assessment, the contracting officer cited four letters of concern and a cure notice that were issued to AAA. AR 1158, 1160. These notices from the Army indicate that AAA's corrective action had not remedied its ITV performance problems consistently. Accordingly, it was reasonable for the contracting officer to conclude that AAA's corrective actions "did not prevent reoccurrence" and evidenced AAA's "lack of quality assurance and operational controls." AR 1160.
In light of this evidence, Plaintiff has failed to demonstrate that Anham and AAA were similarly situated with respect to ITV use.
Plaintiff also alleges that the contracting officer applied disparate standards when evaluating withheld payments. Although Anham's total amount of withheld payments was approximately $5.6 million, the relevant amount for purposes of the responsibility determination was approximately $1.4 million — the amount attributable to Anham's performance failures after subtracting the amount attributable to missions cancelled for the Government's convenience. AAA 5. For AAA, the total amount of payments withheld was approximately $2.9 million, but approximately $2.8 million was attributable to AAA's performance failures. AR 1158. Although Plaintiff asserts that withheld payments expressed as a percentage of total invoice amounts for each contractor — 2% for Anham and 3% for AAA — are not dramatically different, the withheld payments attributable to AAA's performance failures totaled twice the amount withheld from Anham. Plaintiff has failed to establish disparate treatment with respect to withheld payments.
Plaintiff further alleges that its nonresponsibility determination was unreasonable in light of Anham's failed missions record, citing AAA's eight failed fuel missions as compared to Anham's 62. Pl.'s Mot. for J. on the Am. Admin. R. 24. However, Plaintiff ignores the fact that the contracting officer assessed the HNT contractors in terms of the total amount of withheld payments, which encompassed failed mission payments, pilferage, and backcharges. The dollar value attributable to failed missions was but one factor in the computation of the total amount of withheld payments for each contractor. AR 25526. Thus, while AAA's record was better than Anham's in terms of the dollar value of withheld payments for failed missions — AAA had $708,000 of withheld payments for failed missions while Anham had $5,343,246.44 — AAA was charged a larger amount of pilferage/back charges and fuel back charges than Anham.
Plaintiff also contends that the Army could not reasonably find AAA nonresponsible and Anham responsible when Anham refused to accept fuel delivery missions and AAA continued to provide fuel support services. Plaintiff claims that Anham defaulted on HNT contract requirements when it rejected fuel missions, yet AAA, which never refused fuel missions, was deemed nonresponsible. However, Anham's responsibility determination does not state that Anham defaulted on HNT contract requirements. Rather, AAA points to statements made in August 2011 by Dale Van Dyke, the contracting officer who performed Anham's responsibility determination, that Anham had "repeatedly defaulted on the HNT contract" as support for its claim. See Decl. of Dale Van Dyke ¶ 11(f), Aug. 22, 2011.
Contrary to the August 22, 2011 Van Dyke declaration, the record does not support a conclusion that Anham was in default of the contract requirements. The Army issued two cure notices to Anham. By letter dated January 1, 2010, the Army informed Anham that "the Government considers your failed delivery of the following requirement items specified under [the HNT contract] as a direct act of default." AR 25504. The letter listed several deliverables, including a safety plan, proof of insurance, quality control plan, and list of armed personnel, among others.
On July 5, 2011, the Army issued a second cure notice to Anham, stating that Anham could not refuse missions to "no-go" areas. AR 25518-19. This cure notice stated:
Thus, at the time of Anham's responsibility determination in February, 2012, the Army had retracted cure notices issued to Anham on January 9, 2010, and on July 13, 2011. AR 25507 (memorandum dated January 9, 2010, signed by Lieutenant Colonel David A. MacIntyre retracting January 1, 2010 cure notice); 25523 (memorandum dated July 13, 2011, signed by Major Edward C. Gosline retracting July 5, 2011 cure notice). Therefore, there was no basis for the contracting officer to conclude that Anham had defaulted on the HNT contract's requirements.
Plaintiff claims that Anham's refusal to make fuel deliveries was an act of default. However, the Army retracted the cure notice issued to Anham based on its failure to make deliveries and expressly stated that Anham was not in default. It is not the Court's province to declare an offeror in default on a prior contract not at issue here when the Government has not found that contractor to have been in default. In seeking to have this Court second guess the Government's evaluation of Anham's performance of the HNT contract, Plaintiff is straying far beyond the matter at hand — AAA's responsibility determination. Plaintiff comes perilously close to attacking Anham's responsibility determination — a matter it has not raised as a ground of protest and a matter it would lack standing to challenge. Indeed, the question of whether Anham has complied with a contractual requirement — accepting missions — is a contract administration matter under the HNT contract and not a matter this Court should adjudicate in the context of a bid protest.
Plaintiff alleges that AAA's pilferage issues were not as egregious as Anham's and claims that this too is evidence of disparate and unequal treatment. Anham's responsibility determination indicates that $377,877.30 had been withheld from Anham for four missions in which dry cargo, including an all-terrain gator vehicle, generators, and radios, was missing upon delivery. AAA 6;
Even if Anham had been at fault for some missing cargo, however, Anham was assessed a lower amount of withheld payments for pilferage/backcharges than AAA; $238,158.91 was withheld from Anham for pilferage/backcharges, while $998,143.75 was withheld from AAA for pilferage/backcharges. AR 25526-28.
In sum, because Plaintiff has failed to prove that AAA's and Anham's performance deficiencies under the HNT contract were similar, AAA's nonresponsibility determination does not evidence disparate treatment.
AAA further alleges disparate treatment based upon the classified portions of the Amended AR. The entire discussion of these allegations is contained in the Classified Addendum, filed this date.
AAA has demonstrated that the government unreasonably relied on allegations of forgery contained in a referral for proposed debarment — even though forgeries had never been mentioned during AAA's HNT performance, and the contracting officer never provided AAA with any details of the forgeries or afforded AAA an opportunity to respond. In addition, the contracting officer found that AAA's corrective action was deficient when no corrective action had been taken or requested. Finally, the Government conceded that the contracting officer erred in concluding that AAA engaged in more than a single instance of transponder stacking. Because these unreasonable conclusions taken together had an impact on AAA's nonresponsibility determination, the Court vacates this determination and remands the matter to the contracting officer for reevaluation without consideration of these matters.
To obtain a permanent injunction, a party must show that: (1) it has succeeded on the merits; (2) it will suffer irreparable harm if such relief is not granted; (3) the balance of the hardships tips in the movant's favor; and (4) an injunction will serve the public interest.
Because AAA has succeeded on the merits of its case with respect to the contracting officer's conclusions regarding forgery, proposed debarment, and transponder stacking, the first factor for injunctive relief weighs in AAA's favor. AAA will also suffer irreparable harm, absent a reevaluation of its responsibility. This Court has repeatedly held that a protestor suffers irreparable harm if it is deprived of the opportunity to compete fairly for a contract.
In considering whether the balance of the hardships tips in favor of a protestor, a court must balance the potential harm to the protestor of not granting the injunction against the potential harm to both the Government and the awardees should the injunction be granted.
Finally, the Court finds that an injunction will serve the public interest, noting that "[i]t is well established that there is an overriding public interest in preserving the integrity of the federal procurement process by requiring government officials to follow procurement statutes and regulations."
As such, the Court issues a limited injunction mandating that the Army reevaluate AAA's responsibility and award AAA a contract if the Army determines AAA to be responsible.
1. Plaintiff's Motion to Supplement the AR is
2. Plaintiff's Motion for Judgment on the AR is
3. The Court
4. Defendant's Cross-Motion for Judgment on the AR is
5. The Clerk is directed to enter judgment on the AR in favor of Plaintiff consistent with this opinion.
6. Prior to the release of this opinion to the public, the parties shall review this opinion for competition-sensitive, proprietary, confidential, or other protected information. The parties shall file proposed redacted versions of this decision by
Defendant's cross-motion for judgment on the AR was styled in the alternative as a motion to dismiss based on the Army's referral of AAA for debarment to the Army Suspension and Debarment Officer ("SDO"). After the SDO withdrew AAA's proposed debarment, Defendant's motion to dismiss was rendered moot. Tr. 5, June 18, 2012.
Plaintiff was granted leave to amend the pleadings to include an allegation of disparate treatment. The Government subsequently filed an amended AR, containing some classified material. Plaintiff filed a motion for judgment on the amended AR on July 26, 2012, and Defendant filed a response to Plaintiff's motion and a classified appendix on August 9, 2012. Briefing was completed on August 21, 2012.
18 U.S.C. § 287 (2006) prohibits the act of making or presenting to any officer in the civil or military service of the United States, or to any department or agency, any claim upon the United States knowing that the claim is "false, fictitious, or fraudulent."