OPINION AND ORDER ENTERING PERMANENT INJUNCTION

MARY ELLEN COSTER WILLIAMS, Judge.

In this protest Applied Business Management Solutions, Inc. ("ABMSI") challenges corrective action the General Services Administration ("GSA") took in response to two Government Accountability Office ("GAO") protests by Moody's Consulting Services, Inc, ("Moody's). In response to Moody's first protest against an award to ABMSI, GSA represented to GAO that it was taking corrective action by having offerors realign their pricing, and by GSA revising its price analysis report, reevaluating and documenting past performance and making a new best value award determination, if necessary. GSA undertook this corrective action and almost finished it, when approximately nine months later, Moody's filed a second GAO protest claiming GSA failed to complete its corrective action in timely fashion. In fact, GSA had completed much of its corrective action; it had revised its pricing analysis and past performance analyses a month before the second protest was filed, and these re-evaluations did not suggest any error with the original award to ABMSI. Nonetheless, rather than simply present the revised pricing and past performance analyses to the Source Selection Authority to make a best value determination, GSA claimed a budget cut necessitated such a sweeping reduction in requirements that ABMSI's contract no longer met agency needs, thus warranting termination of ABMSI's contract and a sole-source reprocurement.

GSA's invocation of budget-mandated reduced needs to conclude that ABMSI's contract no longer met agency requirements was unsupported by the record and erroneous. ABMSI's contract from the start accommodated a reduction in requirements and could have remained in place without the agency's ensuing conduct — its rush to the Small Business Administration ("SBA") to secure an 8(a) sole-source contract for services that cost more than ABMSI's contract and displaced a competitive award to a service-disabled veteran-owned small business. GSA's conduct was arbitrary, capricious, and anti-competitive, lacked a rational basis, and prejudiced a service-disabled veteran-owned small owned business. As such, this Court declares GSA's sole-source award to Premier Management Corporation ("Premier") null and void, permanently enjoins GSA and Premier from implementing this sole-source contract and orders GSA to complete the corrective action it undertook in response to Moody's protests forthwith.

Findings of Fact2

The Solicitation

On February 1, 2012, the General Services Administration ("GSA") issued solicitation number GS-11P-12-YA-C-0017 ("original Solicitation") as a service-disabled veteran-owned small business ("SDVOSB") set-aside for "administrative support services" for the Public Buildings Service ("PBS"), National Capital Region for a one-year base period with four one-year options. AR Tab 1 at 6; see also AR Tab 24 at 578. The original Solicitation called for approximately 68 full-time positions to perform services in secretarial and administrative-assistant work categories. AR Tab 1 at 6.

Offerors were to submit both a price proposal and a technical proposal. AR Tab 1 at 54-57. The price proposal was to include price sheets with the anticipated firm-fixed price contract total for the estimated labor hours as well as prices for each performance year and five-year schedules, accompanied by supporting documentation to permit the Government to determine price reasonableness. Id. at 55. The technical proposal was to detail how the offeror would satisfy the requirements in the Statement of Work including the following:

AR Tabs 56-57.

Award was to be made to the offer deemed "most advantageous to the Government, price and other factors considered." AR Tab 1 at 58. The factors of Technical and Management Approach and Past Performance were deemed to be of "equal importance," and an evaluation rating of unacceptable in any factor would render that offeror ineligible for award. Id.; AR Tab 18 at 512. The Solicitation stated that the combined evaluation of technical and past performance was significantly more important than price. AR Tab 1 at 58.

Each factor was to be evaluated against performance standards, given a rating with a rationale, and evaluated according to risk level, strengths, weaknesses, and deficiencies.

Past performance ratings were to be based upon the following factors:

Id. at 56.

The Solicitation required past performance reports for three projects performed within the last five years by the entity that would perform the work. AR Tab 1 at 57. The three projects had to be similar in size, scope and complexity to the requirements in the Solicitation. Id. GSA issued an Amended Solicitation effective February 15, 2013, that changed the performance periods, reduced the number of personnel needed from 68 to 61, and altered the language in the "Terms that Affect Price" clause. AR Tab 11 at 239. The Amended Solicitation reduced this requirement to two projects and specified that if subcontractors or joint ventures had been involved in a project, then the entity that performed one of the two projects had to be the entity that performed the work. AR Tab 10 at 178.

The original Solicitation contained a paragraph entitled "Terms That Affect Price," stating:

AR Tab 1 at 14.

In the Amended Solicitation, the "Terms That Affect Price" paragraph provided:

AR Tab 10 at 134.

Evaluation and Award

GSA received 66 offers, including those from ABMSI, Moody's, and Premier. AR Tab 15 at 432-44; Tab 16 at 457. ABMSI and Moody's technical proposals were both rated [. . .]. Id.

GSA rated ABMSI's past performance [. . .] and Moody's past performance [. . .]. AR Tab 15 at 446-47; AR Tab 16 at 470. There was [. . .] for ABMSI's past performance rating. Id. The breakdown of ABMSI's and Moody's ratings according to each past performance evaluation factors were as follows:

AR Tab 15-17.

ABMSI's [. . .] rating was based upon its submission of projects that were [. . .], which led GSA's Technical Evaluation Team to conclude that ABMSI [. . .]. AR Tab 16 at 470.

GSA attempted to contact Moody's references multiple times to no avail, and this lack of information led to a [. . .] rating. AR Tab 15 at 447. GSA noted the following regarding Moody's past performance:

See AR Tab 15.

The evaluation team's rationale for Moody's [. . .] Performance Confidence Assessment was:

AR Tab 15 at 447.

GSA determined that Moody's posed a [. . .] due to its submission of projects [. . .]. AR Tab 15 at 446-47.

The average hourly rates and contract values for each offer were as follows:

AR Tab 19 at 527.

The original Solicitation provided for performance in the following phases:

AR Tab 1 at 8-9.

GSA provided the following response to an offeror's question regarding whether the periods of performance in the original Solicitation were accurate:

AR Tab 6 at 94.

GSA also provided the following response to an offeror's question regarding the purpose of having three phases in the base year:

AR Tab 6 at 95.

The original Solicitation provided for 68 employees during the base year (March 1, 2012-February 28, 2013) encompassing all three phases. AR Tab 1 at 8-9. However, the Amended Solicitation called for 61 employees during the base year according to these phases:

AR Tab 11 at 233-39.

GSA created a Price Analysis Report to ensure that offered prices were fair and reasonable. AR Tab 19 at 522. This report was signed on August 14, 2012, by GSA's Contracting Officer, Elaina Walker and Senior Contract Specialist, Lily Thompson. Id. The prices of 23 out of 66 offers were found to be fair and reasonable, including those of ABMSI and Moody's.3 Id. at 524. Of the reasonably priced offers, Moody's was the [. . .] least expensive and ABMSI, the [. . .] least expensive. Id. at 527.

On August 24, 2012, GSA issued a Price Negotiation Memorandum concluding that [. . .]. AR Tab 20 at 531.

GSA's Contracting Officer, Elaina Walker and Senior Contract Specialist, Lily Thompson explained:

AR Tab 20 at 531.

GSA adjusted offerors' pricing at the time of the award (which was delayed several months), in order to ensure consistency with hours in the new periods of performance but did not make any changes to offerors' rates. AR Tab 19 at 525.

On August 24, 2012, GSA awarded Contract number GS-11P-12-YA-C-0017 ("Contract 0017") to ABMSI for a base-year price of $[. . .]. AR Tab 21 at 534. Assuming the exercise of all option years, ABMSI'S award amount was $[. . .]. AR Tab 21 at 534. Moody's base year price was $[. . .]. AR Tab 26 at 600. That same day, GSA notified Moody's of the award but sent the notification to an incorrect email address. AR Tab 24 at 575-76. On September 4, 2012, Moody's emailed the contract specialist inquiring about the status of the award. AR Tab 23 at 572. The following day GSA responded as if this inquiry had been a request for a debriefing, and sent the Notice of Award to Moody's correct email address. Id. at 572-73, see also AR Tab 24 at 577. ABMSI began performance on September 1, 2012. AR Tab 10. GSA exercised ABMSI's option for year 1, which began on September 1, 2013.

Moody's Original GAO Protest

Eight months later, on April 5, 2013, GSA sent Moody's a written debriefing. AR Tab 26 at 596. The debriefing explained the rationale for the award to ABMSI and detailed how GSA arrived at Moody's readjusted pricing stating:

AR Tab 26 at 600.

On April 9, 2013, Moody's filed a protest with GAO, alleging that the past performance evaluation and price adjustment were improper. AR Tab 27. Moody's claimed that its two submitted projects exceeded the requirements in the Solicitation, stating that the "complexity of the administrative aspect of the Fort Dix contract alone outweighs the administrative support required" by this Solicitation. Id. at 607.

Specifically, Moody's stated:

Id. at 604.

Moody's protest continued:

Id. at 608.

Moody's claimed that the award to ABMSI was unfair and resulted from a "false rationale for the award based on the best interest of the Government to pay a higher premium." Id. at 609. Three days later, on April 12, 2013, GSA issued a stop-work order on Contract 0017 and notified ABMSI of Moody's protest. AR Tab 28 at 611.

On May 2, 2013, 23 days after the protest was filed, GSA informed GAO that in response to Moody's protest it had decided to take corrective action and requested that GAO dismiss Moody's protest stating:

AR Tab 30 at 623-24.

On May 3, 2013, GAO dismissed Moody's protest as moot. AR Tab 40 at 835. On May 7, 2013, GSA cancelled the stop-work order and directed ABMSI to resume work. Compl. Ex B at 1.

GSA's Corrective Action and Reduced Requirements

GSA began undertaking corrective action in early May, 2013. AR Tab 30 at 623. On May 16, 2013, GSA requested that ABMSI and Moody's submit realigned pricing by May 17, 2013, and both complied. AR Tabs 31-34. Realigning prices required each offeror to complete a price table, change its proposed prices to reflect new contract performance periods, and include hourly rates for each labor category. AR Tab 31 at 625.

On August 6, 2013, GSA's Contracting Officer Representative Calvin Dawes, emailed Clair Fortune, Director of GSA's Office of Organizational Resources, Contracting Officer Elaina Walker, and Airis Gill, GSA's Deputy Director of Office of Organizational Resources, stating:

AR Tab 46 at 854.

On August 7, 2013, ABMSI's Chief Operating Officer, William H. McGlockton II, met with Calvin Dawes. Pl.'s Mot. For Leave to Suppl. the AR Ex. B, McGlockton Decl. ¶ 4. Mr. Dawes told Mr. McGlockton "that GSA was planning on rescaling ABMSI's Contract by anywhere between 25-40%, but that such modification might not be implemented before the exercise of ABMSI's Contract option on September 1, 2013." Id.

According to the affidavit of Mr. McGlockton, a week later, on August 14, 2013, GSA's Contracting Officer, Elaina Walker, notified Mr. McGlockton that:

Id. at ¶¶ 5-6.

Contracting Officer Walker recalled that during this conversation she told Mr. McGlockton that:

First Walker Decl. ¶ 4.

Contracting Officer Walker continued:

Id. at ¶ 5.

GSA's Corrective Action and Legal Review

On August 28, 2013, as part of the corrective action, GSA's Past Performance Team completed its first draft of the past performance analysis and submitted it for legal review. AR Tab 35. The Past Performance Team rated ABMSI's past performance as [. . .], and rated the overall past performance of Moody's as acceptable with [. . .]. Id. at 687, 693-94. The same day, Contracting Officer Elaina Walker submitted to agency counsel GSA's conclusion that the prices submitted by both ABMSI and Moody for the new contract performance periods were [. . .]. Id. at 739.

This rating was based on ABMSI's [. . .] by GSA's evaluator as well as its [. . .] overall rating by its references. Id. at 687. [. . .] Id. at 684. The Past Performance Team found [. . .] to be [. . .]. Id. at 684-87. [. . .]. Id.

The Past Performance Team explained that its [. . .] rating for Moody's was due to [. . .]. Id. at 693. Moody's had submitted [. . .] for past performance evaluation. Id. at 690-92. Project 1 [. . .], project 2, [. . .]. Id. The [. . .] the scope of this Solicitation, but only project 1 [. . .]. Id. at 690-91. [. . .] involved [. . .] and represented a contract worth only [. . .]% of the amount of the 0017 contract. Id. at 691. [. . .] was found to be [. . .] in size, scope and complexity to this Solicitation involving [. . .]. Id. at 692. The Team concluded that it had [. . .] that an administrative services contract would be successfully performed by Moody's. Id. at 693.

On September 5, 2013, GSA's counsel identified errors in the Past Performance Team's report, including its [. . .]. AR Tab 36 at 695-717. That same day, GSA's counsel advised the Past Performance Team to revise the draft to address her concerns and stated:

Id. at 695. Counsel noted that [. . .]. Id. at 701.

On November 4, 2013, the Past Performance Team submitted its second Past Performance analysis report to GSA's counsel for review, again rating ABMSI as [. . .] and Moody's as [. . .]. AR Tab 37 at 747, 752, 754-55. In the second revised past performance report, counsel's concerns regarding the [. . .] were largely addressed. See AR Tab 36. As counsel had directed, the second draft contained information that had been lacking in the prior draft, including [. . .]. AR Tab 37 at 753.

The second draft report stated:

Id. at 747.

On November 13, 2013, GSA's counsel provided her review of the second Past Performance Team evaluation report. AR Tab 38 at 772, 782. Specifically, in regard to Moody's past performance, counsel commented that the Past Performance Team [. . .]. Id. Counsel also suggested substituting her own ratings in lieu of those compiled by the Past Performance Team, inserting: [. . .] next to what had been Project 1's [. . .] rating, [. . .] for Project 2's [. . .], and [. . .] for what had been Project 3's [. . .]. Id. at 778-81.

Counsel determined that an overall rating of [. . .] for Moody's second project, which involved transportation services from an employee parking lot to a Veteran Affairs Medical Center, was inconsistent with the evaluators' finding of [. . .] and had to be reversed. Id. at 785. In addition, counsel wrote the following: [. . .]. AR Tab 38 at 772. Counsel also questioned the Past Performance Team's conclusions as to evaluations for ABMSI and Moody's throughout the draft and directed the team to revise the draft. Id. at 775-77.

On December 12, 2013, the Past Performance Team submitted a third more detailed report analyzing ABMSI's and Moody's past performance which maintained the same overall ratings. AR Tab 39 at 812-13. This report included rationales for each rating, in response to counsel. AR Tab 38-39.

Although the Past Performance Team was [. . .], the 10-page consensus report was deemed finished and had been submitted to the Source Selection Authority, Ms. Walker, for her decision. Tr. 104-06, May 14, 2014. The sole action remaining to complete GSA's corrective action as of December, 2013, was for the Source Selection Authority to make an award decision. Id. at 103-06. Despite completing both the third past performance evaluation report and the adjustment for realigned pricing — the totality of corrective action addressing Moody's protest of the award to ABMSI — the agency did not make an award. The record does not indicate what activities, if any, GSA undertook to complete corrective action after December 12, 2013.

Moody's Second GAO Protest and GSA's Offer to Settle

On January 29, 2014, Moody's filed a second GAO protest claiming that GSA failed to complete its corrective action in a reasonable and timely manner. AR Tab 40 at 834; see also AR Tab 44 at 846.

Three business days after Moody's filed its second protest, on February 3, 2014, GSA offered to settle this protest by paying Moody's protest costs. AR Tab 44 at 846. On February 11, 2014, GSA's Contracting Officer, Elaina Walker and Contracting Director, Melanie Lewis, signed a document titled "Limited Acquisition Plan Project Information" stating that:

AR Tab 66 at 947. The "Limited Acquisition Plan Project Information" does not identify what "agency budgetary commitments" necessitated a reprocurement. Id.

On February 18, 2014, Moody's rejected GSA's settlement offer. AR Tab 44 at 846. Eight days later, on February 26, 2014, GSA's counsel sent a four-page letter to GAO, recounting the background to Moody's second protest stating:

GSA's letter continued:

AR Tab 44 at 846 (internal citations omitted). The referenced "issues brought to light by the original protest" were not identified.

In its February 26, 2014 letter to GAO, GSA further stated:

Id. at 847.

GSA's referenced "reassessment of its administrative support needs" that led to its conclusion that "the level of support in the ABMSI contract no longer reflected its needs" is not documented. That same day, February 26, 2014, GSA's Contracting Officer Elaina Walker issued a stop-work order to ABMSI, effective March 21, 2014, noting that the contract was being terminated for the Government's convenience. Compl. Ex. D at 1.4

GSA's Sole-Source Offer Letter to the Small Business Administration

The day after its notice of corrective action to GAO, on February 27, 2014, GSA sent a two-page offer letter to the SBA requesting that SBA accept the administrative support services requirement being fulfilled by ABMSI into SBA's 8(a) Program as a sole-source award. AR Tab 68 at 962. The letter characterized the sole-source award as "a follow up contract to an administrative support services for the Public Building Services at National Capitol Region . . . being terminated for government convenience effective March 14, 2014" and identified Premier Management Corporation as a potential contract awardee. AR Tab 76 at 1101 (stating that GSA "proposes to award a contract on a sole source basis under the Section 8(a) program and has identified Premier Management Corporation) as a potential source for a contract award."); see also AR Tab 68 at 962. The letter stated:

AR 68 at 962-63.5

SBA's Acceptance of the Sole Source 8(a) Set Aside

On Thursday, March 13, 2014, at 12:44 p.m. SBA's 8(a) Business Opportunity Specialist, Christine Kingston, emailed GSA's Contract Specialist, Theophilus Hlovor, asking for additional information to process GSA's February 27th request for a sole-source set aside namely, (1) the original offer letter, (2) the statement of work, and (3) the acquisition history, including the firm currently performing the work. AR Tab 78 at 1112. Two hours later, Contract Specialist Hlover responded via email that "Below is the original letter sent and the statement of work. The incumbent is not an 8a firm. It is a service-disabled veteran own[ed] small business. It was competed with 61 vendors participating. The name is ABMSI . . . ." Id. at 1113. The original letter and Statement of Work do not appear as an attachment in the AR and no additional documents appear to be attached to this email. Id.

Twenty-five minutes later SBA sent GSA its letter of acceptance, via email, for the sole source set-aside, stating that Premier met all the requirements to fulfill the contract. AR Tab 77 at 1103. SBA stated:

The results of the analysis revealed that:

AR Tab 77 at 1103.

That same day, March 13, 2014, GSA notified Premier it was awarded Contract No. GS-11P-14-YA-0018 ("0018") on a sole source basis in the amount of $[. . .], for 43 management support personnel to work from March 24, 2014 until December 31, 2014. AR Tab 81 at 1127; see also AR Tab 77 at 1105. In the original procurement Premier's bid price was $[. . .] more than ABMSI's, and its past performance was found to be [. . .] with a [. . .] and to present a [. . .] risk factor to the Government. AR Tab 17 at 485-86.

Procedural History

On March 14, 2014, ABMSI filed the instant protest requesting the Court to enjoin the termination of its contract and the sole-source award to Premier. Compl. 1-2, 9-10. The parties agreed to a voluntary stay commencing on March 17, 2014, to delay the March 21, 2014 effective termination date of ABMSI's Contract 0017 to enable the Court to resolve the protest. On March 19, 2014, GSA's CO issued a stop-work order to Premier on contract 0018 until June 4, 2014. AR Tab 82 at 1161. The Government extended the stay until August 1, 2014.

At oral argument on cross motions for Judgment on the AR, the Court ordered that the Government produce documents relating to its claim that the agency had a 34-percent budget reduction for this requirement. On May 19, 2014, the Government filed Exhibits B, C, D, and asserted that these documents "confirm[ed] the need to reduce administrative staff, what the reductions would be and how that would impact [the ABMSI contract]." Notice of Filing (May 19, 2014). Exhibit B is a memorandum dated November 7, 2011, from the Executive Office of the President that directs agencies to reduce their administrative support staff by 15 % during FY 2012. Exhibit C is an email dated July 15, 2013, from Claire Fortune, GSA's Deputy Office Director of the Office of Leasing to several GSA employees.6 The email includes a table describing GSA's financial outlook for FY 13, 14, and 15. The entry for FY 14 calls for "a mandated reduction by [Contracting Officer] of 34%" and notes that "[w]e are asking for additional details and clarification." Exhibit C does not list any specific contracts but states that "[i]n order to see where we can reduce based upon the Central Office mandate, you will need to validate and prioritize your respective contractors", giving each contractor a rating 1, 2, or 3. 1 to signify "keep," 2 to signify "maybe" keep, 3 to signify "immediate reduction." Exhibit D is a spreadsheet with column headings titled, "Business Line Supported," "Role/Position," "Company," "Contract Number," "PDN," "Part Time or Full Time," "Proposed FY 2014 Obligation," "Proposed FY 2015 Obligation," "Rating," "Expiration Date," "Reduction Category," "10% Rating," "Change," "Spend Tracker Status," and appears to contain the ratings "1," "2," and "3" in each row with an employee's name. Notice of Filing, Exh. D. (May 19, 2014). The Government acknowledged that the record did not contain any document that explained what Exhibit D was, who prepared it, or when it was prepared. Tr. 20, June 11, 2014.

Neither party requested that the AR be supplemented with Exhibits B-D. Id. at 8-25. In Plaintiff's view, Exhibits B, C, and D, raised more questions than they answered and did not establish GSA's reduced budget requirements or explain the impact those requirements would have on the ABMSI contract. Id. When the Court asked the Government whether there were any additional documents addressing the budgetary constraints described by the Government, counsel for the Government stated that according to GSA counsel, Exhibits B and C were the "only documents related to that fiscal year (FY 2014)" that she could locate. Id. at 19.

Discussion

Jurisdiction and Standard of Review

The Tucker Act confers jurisdiction on this Court "to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement." 28 U.S.C. § 1491(b)(1) (2012). "Standing is a question of subject matter jurisdiction. . . ." Archura LLC v. United States, 112 Fed. Cl. 487, 497 (2013) (citing S. Cal. Fed. Sav. & Loan Ass'n v. United States, 422 F.3d 1319, 1328 n.3 (Fed. Cir. 2005)). Plaintiff "bears the burden of establishing [the] elements [of standing]" because it invokes this Court's jurisdiction. Myers Investigative & Sec. Servs. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002) (alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).

The Tucker Act instructs this Court that in any action under §1491(b)(1), the court shall review the agency's decision pursuant to the standards set forth in the Administrative Procedure Act ("APA"). The APA states that the "reviewing court shall — . . . (2) hold unlawful and set aside agency action, findings, and conclusions found to be — (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706.

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." Ala. Aircraft Indus., 586 F.3d at 1375 (alteration in original) (quotation marks omitted) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

This Court will review the basis for the agency decision to determine if it was "legally permissible, reasonable, and supported by the facts." FNC Inc. v. United States, 115 Fed. Cl. 335, 361 (2014). To review the reasonableness of an agency action, "`[c]ourts look for a reasoned analysis or explanation for an agency's decision as a way to determine whether a particular decision is arbitrary, capricious, or an abuse of discretion.'" Atar S.R.L. v. United States, 730 F.3d 1320, 1325 (Fed. Cir. 2013) (quoting Wheatland Tube Co. v. United States, 161 F.3d 1365, 1369 (Fed. Cir. 1998)). A court will overturn an agency's decision as arbitrary and capricious if it "entirely failed to consider an important aspect of the problem." FNC, 115 Fed. Cl. at 364 (quoting SFK USA Inc. v. United States, 630 F.3d 1365, 1374 (Fed. Cir. 2011). An "agency must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." In re Sang-Su Lee, 277 F.3d 1338, 1344 (Fed. Cir. 2002) (quotation marks omitted) (quoting Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43); FNC, 115 Fed. Cl. at 363 (citing WorldTravelService v. United States, 49 Fed. Cl. 431, 441 (2001)) (citations omitted).

An agency remains obligated to develop an evidentiary basis for its findings. FNC, 115 Fed. Cl. at 368 (citing Sang Su Lee, 277 F.3d at 1344). "`The grounds upon which an administrative order must be judged are those upon which the record discloses that its actions are based.'" Changzhou Wujin Fine Chem. Factory Co., Ltd. v. United States, 701 F.3d 1367, 1377 (2012) (quoting SEC v. Chenery Corp., 318 U.S. 80, 87 (1943)).

In resolving bid protests, the trial court is to make findings of fact weighing the evidence in the Administrative Record. See Bannum, Inc. v. United States, 404 F.3d 1346, 1355 (Fed. Cir. 2005). If the court finds that the Government's conduct fails the APA review, then it proceeds to determine as a factual matter if the bid protester was prejudiced by that conduct. Id. at 1351; see also Afghan Am. Army Servs. Corp. v. United States, 106 Fed. Cl. 714, 723 (2012).

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. See FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993); Gentex Corp. v. United States, 58 Fed. Cl. 634, 654 (2003); Hawpe Constr., Inc. v. United States, 46 Fed. Cl. 571, 582 (2000) aff'd, 10 Fed. Appx. 957 (Fed. Cir. 2001). No one factor is dispositive, and "the weakness of the showing regarding one factor may be overborne by the strength of the others." FMC, 3 F.3d at 427.

Plaintiff Has Standing

ABMSI challenges GSA's corrective action taken in response to Moody's two GAO protests. Here, GSA's corrective action embodied three agency actions — 1) the abandonment of the corrective action that GSA had represented to GAO it was undertaking, (even though the reevaluation had been completed), 2) the termination of AMBSI's contract due to a reduction in needs (even though ABMSI's contract was expressly able to accommodate such reduction), and 3) a reprocurement of the same services covered by ABMSI's contract in the form of a sole-source 8(a) award.

This Court has well established jurisdiction over corrective action in a bid protest. Chapman Law Firm v. United States, 490 F.3d 934, 938 (Fed. Cir. 2007) (finding jurisdiction to review corrective action taken by an agency); see generally Centech Grp., Inc. v. United States, 554 F.3d 1029 (Fed. Cir. 2008) (affirming a decision by the Court of Federal Claims in a bid protest challenging corrective action taken to implement GAO recommendation). The Federal Circuit has "made clear that bid protest jurisdiction arises when an agency decides to take corrective action even when such action is not fully implemented." Sys. Application & Techs. v. United States, 691 F.3d 1374, 1381 (Fed. Cir. 2012) (citing Turner Constr. Co. v. United States, 645 F.3d 1377 (Fed. Cir. 2009)) (finding jurisdiction over a bid protest brought by an awardee after the Army terminated the awardee's contract and announced its decision to follow GAO's recommendation to re-compete).

Even though Plaintiff has lodged a bid protest challenging corrective action which is well recognized as being within this Court's jurisdiction, Defendant isolates one aspect of the corrective action, the termination of ABMSI's contract, and contends that GSA's termination was contract administration not subject to this Court's bid protest review. Technically, termination of a contract may be characterized as contract administration subject to challenge under the Contract Disputes Act. But that does not mean that where such termination is taken as part of a larger corrective action in the contract-formation context, it is shielded from bid protest review. Here, the termination is a component of GSA's procurement decision that displaced Plaintiff's award and substituted it with a sole-source award.

Defendant would have this Court put on blinders, ignore what the agency itself characterized as corrective action and view this case not as a bid protest but as a garden-variety contract dispute. Such a tack would misconstrue Plaintiff's complaint and seriously compromise the ability of contractors to protest all facets of corrective action as authorized by 28 U.S.C. § 1491(b) and well entrenched precedent. Because Plaintiff clearly has standing to challenge the corrective action here, Defendant's motion to dismiss is denied.

Plaintiff Has Established Entitlement to Injunctive Relief

Success on the Merits

The Government cites a reduction in budget as the justification for GSA's determination that ABMSI's contract no longer met its requirements, thus prompting its termination of ABMSI's contract for convenience and subsequent award of a sole-source contract for these services to Premier.7 Even accepting that there was a budget cut that applied to ABMSI's contract — a fact Defendant failed to establish — the agency did not have to terminate ABMSI's contract and reprocure the services on a sole-source basis. AR Tab 47 at 857.8 As the Government acknowledged, ABMSI's contract could have been modified to reduce the quantity of services being procured. Tr. 101-02, June 11, 2014. The amended solicitation had a clause reserving to GSA the right to "award for all or fewer than all of the number of positions designated on the contract line items in the pricing tables." AR Tab 10 at 134. Specifically, the "Terms That Affect Price" paragraph provided:

AR Tab 10 at 134.

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." Ala. Aircraft Indus., 586 F.3d at 1375 (alteration in original) (quotation marks omitted) (quoting Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43). An "agency must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Sang-Su Lee, 277 F.3d at 1344 (quotation marks omitted) (quoting Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43); see also Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962).

Here, GSA failed to articulate a rational connection between the facts found — its need to reduce personnel performing ABMSI's contract — and its choice of terminating that contract and undertaking a new procurement action requiring SBA's evaluation, review, and approval and ultimately fashioning a more expensive,9 non-competitive sole-source award. The Government acknowledged that ABMSI's contract could have accommodated a reduction in services. Tr. 101-02, June 14, 2011 (conceding the agency could have obtained 43 personnel under ABMSI's contract). Rather than exercise its express contractual right to reduce the number of personnel on ABMSI's contract, GSA, for reasons unexplained in the Administrative Record, terminated ABMSI's contract for convenience and made a sole-source award of the services to Premier at a higher price.

Defendant points to an additional reason that GSA's decision to terminate the ABMSI contract for convenience was justified, citing the agency's concern about the integrity of the award to ABMSI in light of Moody's first protest. The Administrative Record, however, demonstrates that the agency's corrective action addressed the issues in Moody's protest.

In its first protest, Moody's challenged GSA's price adjustments to the contractors' proposals and evaluation of past performance. GSA requested that GAO dismiss Moody's protest, because it was undertaking corrective action, i.e. that it would properly document the past performance evaluation results, request that the contractors realign their pricing, and then revise its price analysis and best value determination in light of the information received.

In taking corrective action, GSA first requested that ABMSI and Moody's submit realigned pricing to reflect the updated contract performance periods. Both contractors promptly submitted realigned pricing. On August 28, 2013, three months later, the Contracting Officer submitted to agency counsel the revised price analysis, stating:

AR Tab 35 at 678.10 GSA's analysis of the contractors' realigned pricing submissions and the agency's revised price analysis addressed and satisfied the first ground of Moody's protest.

In the second facet of the corrective action, GSA completed three analyses of the agency's past performance evaluations between August 28, 2013 and December 12, 2013, and submitted its conclusions to agency counsel for review. Each submission provided more detail that explained the evaluation team's conclusions as well as a rationale for the final assessment ratings, in response to the concerns of agency counsel. In each additional past performance analysis, GSA [. . .]. ABMSI was given a rating of [. . .] and Moody's was given a rating of [. . .]. There is no indication in the record that any further action needed to be taken regarding past performance.

After the adjustment for realigned pricing and the submission of the final past performance evaluation report, all that was left for GSA to do to complete the corrective action was make an award. There is no indication in the record that the award to ABMSI should have been upset based on Moody's protests. The pricing was realigned satisfactorily, and the past performance evaluation was redone twice again, with no suggestion that there was anything infirm in the agency's assessment. See Plasan N. America, Inc. v. United States, 109 Fed. Cl. 561, 572 (2013) (quoting Gulf Grp. Inc. v. United States, 61 Fed. Cl. 338, 351 (2004) (holding that when a court considers a challenge to a past performance evaluation "the greatest deference possible is given to the agency")). In short, GSA has articulated no legitimate reason for failing to finish corrective action that was very close to completion and instead start over and go to the lengths it did to make a sole-source award to Premier. AR Tab 40 at 834. Nonetheless, after nine months, the agency did not complete what should have been a straightforward corrective action.

As a result of the delay, Moody's filed a second GAO protest claiming that GSA failed to complete its corrective action in a reasonable and timely manner. In response, instead of completing the corrective action and mooting Moody's protest, GSA attempted to settle with Moody's, and, for reasons that are indiscernible on this record, offered to pay Moody's protest costs. Then, claiming it needed to avoid a gap in service, GSA decided to award a sole source contract for a nine-month period.

Effecting a sole-source award is no easy feat. In order to promote competition in the procurement process, sole source procurements are subject to a number of restrictions. Innovation Dev. Enter. of Am., Inc.v. United States, 108 Fed. Cl. 711 (2013). A sole source-award could not exceed the threshold in 13 C.F.R. 124.506(a)(2)(ii) ("A procurement offered and accepted for the 8(a) [Business Development] Program must be competed among eligible participants if: the anticipated award price of the contract, including any options will exceed $6.5 million for contracts assigned with NAICS codes and $4 million for all other contracts.") GSA had to reduce both personnel and the contract duration for a nine-and-half-month period (March 21, 2014-December 31, 2014) to meet this threshold, and estimated the cost of procuring this requirement would be $[. . .].11 AR Tab 81 at 1129; Id. at 1117.

In addition, on February 27, 2014, pursuant to FAR Part 10, which requires agencies to conduct market research to arrive at the most suitable approach to acquiring services GSA researched 30 vendors, and determined Premier was the most capable of responding in a short period of time. AR Tab 67 at 956-61. GSA then put together a Request for Proposal that it sent to Premier on March 6, 2014. AR Tab 70 at 989. Premier submitted its offer to GSA on March 11, 2014, and GSA conducted a past performance evaluation. AR Tab 73 at 1053-59; AR Tab 75 at 1098-1100. On March 13, 2014, GSA completed a price analysis of Premier's proposal. AR Tab 80 at 1117-21.

Additionally, FAR 19.804 required GSA to determine "the extent to which a requirement should be offered in support of the 8(a) Program" by evaluating six factors, including "[w]hether the items or work have previously been acquired using small business set-asides and then offering the requirement to SBA providing information, such as "the names and addresses of any small business contractors that have performed this requirement in the previous 24 months." FAR 19.804-2. SBA regulations prohibit SBA from accepting a procurement for award as an 8(a) contract if the procurement will adversely impact an individual small business. 13 C.F.R. 124.504.12 Upon the determination that there is not an adverse impact, SBA may accept the agency's offer via a letter. FAR 19.804-3; AR 1103. Here, both GSA and SBA in endeavoring to comply with the regulations had to invest significant time and effort to effect this sole-source award — an onerous and unnecessary response to Moody's protests.13

The Government argued that GSA's action in terminating ABMSI's contract displacing it with a more expensive sole-source award was "reasonable," and within GSA's discretion. This conduct, however, went beyond the parameters of agency discretion in the procurement setting. It is well established that although procurement officials possess considerable discretion, that discretion is not unfettered. E.g., T & M Distribs., Inc. v. United States, 185 F.3d 1279, 1283 (Fed. Cir. 1999). The sole justifications articulated by GSA for its termination and reprocurement were invalid; the budgetary cuts and reduced personnel could have been accomplished under ABMSI's contract and concerns about Moody's protest were satisfactorily resolved by GSA's revised pricing and past performance analyses. Because Plaintiff has demonstrated that GSA's actions in terminating ABMSI's contract and awarding a sole-source contract to Premier lacked a rational basis and were arbitrary and capricious, Plaintiff has succeeded on the merits of the protest.

Irreparable Harm to Plaintiff and Balance of Hardships

Plaintiff will be irreparably harmed if the termination for convenience and sole-source award to Premier are not enjoined because it lost a contract that represents approximately 38% of Plaintiff's current revenue. Pl.'s Br. 37-39. "Irreparable harm can be shown in the `form of a lost opportunity to fairly compete for and perform work under the contract, including but not limited to lost profits that would generate therefrom.'" SAI Indus. Corp. v. United States, 60 Fed. Cl. 731, 747 (2004) (quoing Metcalf Constr. Co., Inc. v. United States, 53 Fed. Cl. 617, 645 (2002)).

In consideration of whether the balance of hardships tips in Plaintiff's favor, the Court must evaluate the harm to Plaintiff, Defendant, and Premier. Plaintiff will be irreparably harmed in the absence of an injunction, due to its unwarranted loss of its contract and significant and un-recoupable revenue. The Government will suffer no harm from an injunction as the services will continue to be performed at a lower cost than if performed by Premier, through ABMSI's current contract pending completion of corrective action. Premier will suffer ancillary harm from the loss of anticipated revenue, but its harm is less than that of ABMSI.

Defendant asserts that the hardships to Plaintiff would be "relatively minor because it reasonably only could have expected to perform for a few more months at most" on a contract that it "may not have been entitled to in the first place." Def.'s Mot. to Dismiss 39. This argument is unavailing. That Plaintiff could only have expected to perform for a "few more months" does not obviate the fact that Plaintiff would be losing anticipated revenue. Defendant also suggests that the hardship to the Government would be substantial because it would "waste time and public resources" if required to reevaluate proposals that "no longer reflect the agency's requirements." Id. This argument is not persuasive as the agency already evaluated proposals knowing full well that the personnel could be reduced.

The Public Interest

A permanent injunction is properly employed where there is an "overriding public interest" in maintaining the integrity of the federal procurement process. Guzar Mirbachakot Transp. v. United States, 104 Fed. Cl. 53, 68 (2012) (quoting CW Gov't Travel, Inc. v. United States, 61 Fed. Cl. 559, 576 (2004)) (citing United Int'l Investigative Servs., 41 Fed. Cl. 312, 323 (1998)). Here, GSA attempted to justify terminating ABMSI's contract and reprocuring via a sole-source award based on two circumstances — an inconsequential budget cut and an unwarranted concern about Moody's GAO protests. Neither justification supported displacing a competitive award to a service-disabled veteran-owned small business and effecting a noncompetitive higher priced sole-source award. The integrity of the procurement process was compromised by GSA's conduct, and the public interest will be served by injunctive relief.

Order