Lawson Environmental Services, LLC v. United States ( 2016 )

In the United States Court of Federal Claims
No. 15-1550C
(Bid Protest)
(Filed: August 16, 2016)1
************************** Stay Pending Appeal; Rule 62(c); Pass-
* Fail Responsibility-type Evaluation
LAWSON ENVIRONMENTAL * Factors; Referral to Small Business
SERVICES, LLC, * Administration for Certificate of
* Competency; Injunctive Relief.
Plaintiff, *
*
v. *
*
THE UNITED STATES, *
*
Defendant. *
*
**************************
Theodore P. Watson, Watson & Associates, LLC, 13721 East Rice Place, Suite 106,
Aurora, Colorado 80015, for Plaintiff.
Benjamin C. Mizer, Robert E. Kirschman, Jr., Douglas K. Mickle, and Michael D.
Snyder, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box
480, Ben Franklin Station, Washington, D.C. 20044, for Defendant. Kathleen Clever, U.S.
Environmental Protection Agency, 11201 Renner Blvd., Lenexa, KS 66219, Of Counsel.
Christopher J. McClintock, U.S. Small Business Administration, 409 3rd Street N.W.,
Washington, D.C. 20416, Of Counsel.
1
The Court issued this opinion under seal on July 21, 2016, and directed the parties to file
any proposed redactions by July 28, 2016. Neither party has proposed redactions. Accordingly,
the Court publishes this opinion correcting errata.
_________________________________________________________
OPINION AND ORDER DENYING INJUNCTION PENDING APPEAL
_________________________________________________________
WILLIAMS, Judge.
Plaintiff Lawson Environmental Services, LLC (“Lawson”) seeks a stay of this Court’s
judgment in Lawson Environmental Services, LLC v. United States, 126 Fed. Cl. 233 (2016),
and an injunction pending appeal to stop the Environmental Protection Agency (“EPA”) from
allowing Coastal-Enviroworks Joint Venture (“Coastal-Enviroworks”) to begin performing
environmental remediation services in lead-contaminated residential properties in Washington
County, Missouri. EPA initially solicited offers to perform these remediation services on July 8,
2014, and, after a series of protests and corrective action, awarded a contract to Coastal-
Enviroworks on September 29, 2015. Plaintiff protested this award at the Small Business
Administration (“SBA”) and the Government Accountability Office (“GAO”) before filing a
complaint in this Court on December 18, 2015. At that time, EPA voluntarily agreed to stay
performance until March 30, 2016.
The Court entered judgment in favor of the Government and denied Lawson’s motion for
judgment upon the administrative record on March 25, 2016. The Court found that EPA
correctly referred Coastal-Enviroworks to SBA for a Certificate of Competency (“COC”) instead
of rejecting its proposal as nonresponsive, and that SBA acted reasonably in granting Coastal-
Enviroworks a COC.
Almost two months later, on May 20, 2016, Plaintiff filed a notice of appeal to the United
States Court of Appeals for the Federal Circuit, and on May 31, 2016, Plaintiff filed the subject
motion for stay and injunction pending appeal.2 For the reasons set forth below, the Court denies
Plaintiff’s motion.
Discussion
Pursuant to Rule 62(c) of the Rules of the United States Court of Federal Claims,
“[w]hile an appeal is pending from . . . a final judgment that grants, dissolves, or denies an
injunction, the court may suspend, modify, restore, or grant an injunction on terms for bond or
other terms that secure the opposing party’s rights.” Rule 62(c). Because Plaintiff in its
complaint requested only declaratory relief, the Court did not technically deny an injunction.
See Compl. 33; 126 Fed. Cl. at 236. Nevertheless, by declining to declare the award illegal, the
Court refused to set aside the contract or grant what would have been tantamount to injunctive
relief. As such, Rule 62(c) is the proper procedural vehicle for the relief Plaintiff now seeks.
2
Plaintiff requests, in part, that the Court stay the execution of its judgment denying
Plaintiff’s request for declaratory relief. Plaintiff uses the term “stay” interchangeably with a
request for an injunction pending appeal. The Court considers Plaintiff’s request to stop
performance as a request for an injunction pending appeal, consistent with Plaintiff’s reference to
Rule 62(c).
2
An injunction pending appeal pursuant to Rule 62(c) is an extraordinary remedy, and the
Court will not grant such an injunction lightly. RLB Contracting, Inc. v. United States, 120 Fed.
Cl. 681, 682 (2015); see also Akima Intra-Data, LLC v. United States, 120 Fed. Cl. 25, 27
(2015); Acrow Corp. of Am. v. United States, 97 Fed. Cl. 182, 183 (2011). As with injunctions
at other stages of an action, the movant carries the burden of persuasion. Akima Intra-Data, 120
Fed. Cl. at 27 (citing OAO Corp. v. United States, 49 Fed. Cl. 478, 480 (2001)).
Similar to the Court’s consideration of a request for a preliminary injunction, the Court
will consider the following factors when determining whether to grant an injunction pending
appeal: whether the movant has shown that (1) the movant is likely to prevail on the merits of the
appeal; (2) the movant will be irreparably harmed absent an injunction; (3) the injunction will
not substantially injure the other interested parties; and (4) issuance of an injunction is in the
public interest. Int’l Res. Recovery, Inc. v. United States, 60 Fed. Cl. 1, 6 (2004) (citing FMC
Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993)); RLB Contracting, 120 Fed. Cl. at 682
(citing Acrow Corp. of Am., 97 Fed. Cl. at 184); Akima Intra-Data, 120 Fed. Cl. at 27-28 (citing
Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 513 (Fed. Cir. 1990)). The
Court’s consideration of these four factors is “flexible” - - no single factor is determinative, and
the Court need not give each factor equal weight. Standard Havens Prods., 897 F.2d at 512; see
also Akima Intra-Data, 120 Fed. Cl. at 28; Int’l Res. Recovery, 60 Fed. Cl. at 6.
Plaintiff Has Failed To Show It Has A Likelihood Of Success On The Merits Of Its Appeal
Plaintiff contends that it is likely to succeed on the merits of its appeal for three reasons:
(1) The Court erred in determining that Coastal-Enviroworks failed to meet a
responsibility-type factor that was subject to referral to SBA, rather than a mandatory solicitation
requirement that rendered Coastal-Enviroworks’ proposal nonresponsive;
(2) The Court incorrectly found that EPA acted reasonably in accepting an affidavit from
one of Coastal-Enviroworks’ proposed key personnel; and
(3) The Court failed to fully review both EPA’s referral of Coastal-Enviroworks to SBA
and SBA’s subsequent issuance of a COC.
“[L]ikelihood of success in the appeal is not a rigid concept.” Standard Havens Prods.,
897 F.2d at 512 (citing Wash. Metro. Area Transit Comm’n v. Holiday Tours, 559 F.2d 841, 844
(D.C. Cir. 1977)). For instance, where a movant presents legal issues of first impression, the
likelihood of success on appeal is impossible to determine, and the Court may grant an injunction
pending appeal so long as the remaining factors weigh sufficiently in the movant’s favor. Akima
Intra-Data, 120 Fed. Cl. at 28 (citing Jacobson v. Lee, 1 F.3d 1251 (Fed. Cir. 1993); see also
Acrow Corp. of Am., 97 Fed. Cl. at 184 (“[T]he court may grant an injunction under RCFC 62(c)
when the question raised is novel or close, especially when the case will be returned to the trial
court should the movant prevail on appeal.”).3 However, where a movant seeks to “relitigate
3
This Court orally granted a stay pending appeal in a bid protest that raised an issue of
first impression. Tr. at 32-40, CGI Fed. Inc. v. United States, No. 14-355C (Fed. Cl. Sept. 2,
2014), ECF No. 55; Order, CGI Fed. Inc. v. United States, No. 14-355C (Fed. Cl. Sept. 2, 2014),
ECF No. 53.
3
several issues that the opinion addressed fully and resolved” or otherwise has failed to raise
“issues with the opinion that are so novel as to merit the extraordinary remedy of injunctive relief
pending appeal,” the Court will deny an injunction. Acrow Corp. of Am., 97 Fed. Cl. at 185.
In its current motion, Plaintiff recasts its previously raised arguments. Compare Pl.’s
Mot. 5-18 with Pl.’s Mot. for J. on the AR 12-40. None of Plaintiff’s arguments below
implicated novel or close questions.
The gravamen of Plaintiff’s motion is that the Court erred in upholding EPA’s referral of
Coastal-Enviroworks to SBA for a COC determination. Plaintiff has not demonstrated this
decision was erroneous, an issue of first impression, or a close question. Rather, this Court noted
that Plaintiff’s challenge to EPA’s referral to SBA for a COC “is not a gray area.” Lawson, 126
Fed. Cl. at 246.4 In the small business context, where the offeror fails a solicitation requirement
that encompasses a traditional responsibility factor, the proper course is for the agency to refer
the matter to SBA. As the Court explained in its opinion:
“[W]here traditional responsibility factors are employed as technical evaluation
criteria and the evaluation renders an offeror’s proposal flatly ineligible for award,
the agency has effectively made a determination that the small business offeror is
not a responsible contractor capable of performing the solicitation requirements.”
Optimization Consulting, Inc. v. United States, 115 Fed. Cl. 78, 100 (2013)
(internal citation and quotation marks omitted). In those circumstances, the
agency must refer the matter of the firm’s responsibility to SBA for a Certificate
of Competency determination. Id.; Planet Space, Inc. v. United States, 92 Fed.
Cl. 520, 546 (2010) (finding that, where “responsibility-type concerns” result in
an offeror’s exclusion from the competition, “a de facto non-responsibility
determination has been made and, in the case of a small business, referral to the
SBA is required”).
Lawson, 126 Fed. Cl. at 245.
Here, the evaluation factor for Key Personnel fell within the realm of a responsibility
determination and was a pass-fail factor, and failure would have rendered Coastal-Enviroworks
ineligible, warranting referral to SBA.
In reiterating its argument that Coastal-Enviroworks’ proposal should have been rejected
as nonresponsive, Plaintiff asserts that the Court misinterpreted Manus Medical, LLC v. United
States, 115 Fed. Cl. 187 (2014). Pl.’s Mot. 7-9, 13. Plaintiff’s argument lacks merit. As
explained in the Court’s opinion:
Plaintiff relies on Manus Medical, LLC v. United States, 115 Fed. Cl. 187 (2014)
to argue that Coastal-Enviroworks’ proposal should have been rejected as
nonresponsive. In Manus, the agency eliminated the lowest-price offeror from the
competition because the offeror failed to submit a complete proposal and omitted
4
In a similar vein, this Court denied Plaintiff’s evidentiary argument regarding
consideration of the affidavit as “contrary to governing regulation.” Lawson Envtl. Servs., LLC
v. United States, 126 Fed. Cl. 233, 248 (2016).
4
information necessary for the evaluation of two technical factors. 115 Fed. Cl. at
192. As such, the agency could not make a determination on technical
acceptability and rejected the proposal as deficient for omitting required
information. Here, in contrast, the agency could and did evaluate Coastal-
Enviroworks’ technical proposal on a responsibility-type factor and failed
Coastal-Enviroworks for noncompliance, requiring a referral to SBA.
Lawson, 126 Fed. Cl. at 246 n.4.5
Because the EPA evaluation team disqualified Coastal-Enviroworks’ proposal from
consideration on the basis of this responsibility-type factor, removing Coastal-Enviroworks from
the competition, EPA properly referred its decision to SBA for a COC.
The Court has reviewed Plaintiff’s other arguments in support of its motion and
concludes that Plaintiff merely “seeks to litigate issues that the opinion fully addressed and
resolved.” Acrow Corp. of Am., 97 Fed. Cl. at 185. Accordingly, Plaintiff has failed to show a
likelihood of success on the merits of its appeal.
Other Factors Warrant Denial Of Injunctive Relief
In this Court’s view, Plaintiff has not demonstrated any likelihood of success on the
merits. But even if it had, other factors militate against injunctive relief.
Plaintiff argues that it will be irreparably harmed absent an injunction pending appeal
because, should Coastal-Enviroworks begin performance, Plaintiff will be precluded from
obtaining meaningful relief. Pl.’s Mot. 18-19; see, e.g., Hosp. Klean of Tex., Inc. v. United
States, 65 Fed. Cl. 618, 624 (2005). However, Plaintiff’s claim of irreparable harm is belied by
its lack of urgency in seeking this injunction. Plaintiff did not file its request for an injunction
pending appeal until over two months after this Court issued its decision on March 25, 2016, and
EPA’s voluntary stay expired. The challenged contract has now been actively ongoing for over
three months.
In contrast, the injury to the Government should this Court issue an injunction is
palpable. EPA issued the solicitation at issue nearly two years ago. The Washington County
sites at which Coastal-Enviroworks is performing remedial actions were added to the National
5
Similarly, Plaintiff cites Centech Group, Inc. v. United States, 554 F.3d 1029 (Fed. Cir.
2009) in support of its argument that Coastal-Enviroworks’ proposal should have been rejected
as nonresponsive. Centech is inapposite, as Centech’s proposal was properly deemed
nonresponsive for failure to comply with the Limitation on Subcontracting clause. Centech did
not involve a challenge to an agency’s referral of a contractor to SBA for a responsibility
assessment. Rather, Centech drove home the fundamental distinction between responsibility and
responsiveness. Centech instructed that whether an offeror could comply with a technical
requirement is a matter of the contractor’s responsibility, whereas whether an offeror agreed in
its proposal that it would comply with a technical requirement is a matter of the proposal’s
responsiveness. Centech involved a quintessential example of a nonresponsive proposal, while
this case presented a classic example of a small business offeror’s capability to meet a
responsibility-type technical requirement.
5
Priority List in 2011. Continued delay in this procurement for vital lead remediation services
would impede EPA in its mission to protect human health and the environment pursuant to the
Comprehensive Environmental Compensation and Liability Act, the National Oil and Hazardous
Substances Pollution Contingency Plan, and other statutes.
Plaintiff asserts, without support, that EPA will suffer minimal injury because the agency
may currently procure the necessary services through delivery orders issued under another
contract. The record, however, establishes that reliance on this contract is misplaced because the
scope of Plaintiff’s cited contract covers a different geographical region, and the contract is
funded through EPA’s “removal funds” which are separate from - - and scarcer than - - the
agency’s “remediation funds,” which apply to the contract at issue. See Gunn Decl. ¶ 5;
Buchholz Decl. ¶¶ 2-4. Given the need for the procurement to proceed after having been delayed
for over a year due to protests and appeals, the balance of harms weighs in favor of the
Government and against issuance of an injunction.
The public interest also lies in allowing this procurement to proceed. Plaintiff’s concern
about the “overriding public interest in preserving the integrity of the procurement process by
requiring the Government to follow its procurement regulations” is valid. Pl.’s Mot. 20 (quoting
Bona Fide Conglomerate, Inc. v. United States, 96 Fed. Cl. 233, 242 (2010)). However, the
evidence in this case shows that the Government did follow its procurement regulations. Further,
the public has a heightened interest in continuing performance under this contract, as the
contaminated soil, groundwater, surface water, and sediment at the Washington County sites
have affected residences, schools, daycare centers, parks, playgrounds, and drinking water wells.
Gunn Decl. ¶ 2. Continuing delay presents serious health risks to people, especially children,
who live in this area. Id. at ¶¶ 2, 7. Thus, the public interest militates against an injunction
pending appeal.
Conclusion
This protest does not involve any novel or close legal questions. Plaintiff has failed to
show a likelihood of success on the merits, and the balance of harms and the public interest
support denying the requested injunctive relief. Plaintiff’s motion for stay and injunction
pending appeal is DENIED.
s/Mary Ellen Coster Williams
MARY ELLEN COSTER WILLIAMS
Judge
6