Safeguard Base Operations, LLC v. United States

In the United States Court of Federal Claims
No. 18-1515C
Filed: October 25, 2018
Redacted Version Issued for Publication: November 5, 20181
* * * * * * * * * * * * * * * * ** *
SAFEGUARD BASE OPERATIONS, *
LLC, *
*
Protestor, *
*
v. * Post-Award Bid Protest; CICA Stay
* Override; Motion for Temporary
UNITED STATES, Restraining Order; Motion for
*
* Preliminary Injunction.
Defendant,
v. *
B&O JOINT VENTURE, LLC, *
Defendant-Intervenor. *
* * * * * * * * * * * * * * * * ** *
Alexander B. Ginsberg, Pillsbury Winthrop Shaw Pittman, LLP, McLean, VA, for
protestor. Of counsel was Alex D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman, LLP,
McLean, VA, Aaron S. Ralph and Kevin R. Massoudi, Pillsbury Winthrop Shaw Pittman,
LLP, Los Angeles, CA, and Diana Parks Curran and Hadeel Masseoud, Curran Legal
Services, Johns Creek, GA.
P. Davis Oliver, Senior Trial Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington, D.C., for defendant. With him
were Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E.
Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant
Attorney General. Of counsel was James C. Caine, Attorney, Federal Law Enforcement
Training Centers, Glynco, GA.
1 This Opinion was issued under seal on October 25, 2018. The parties were asked to
propose redactions prior to public release of the Opinion. Defendant responded that
defendant “does not propose any redactions to the Court’s sealed opinion.” Defendant-
intervenor proposed to redact information defendant-intervenor identified as its
“proprietary pricing.” Protestor proposed to redact several types of non-public information,
which protestor asserts to be confidential and exempt from public disclosure. This opinion
is issued with all of the redactions that the parties proposed in response to the court’s
request. Words which are redacted are reflected with the notation: “[redacted].”
Richard W. Arnholt, Bass, Berry & Sims PLC, Washington, D.C., for defendant-
intervenor. Of counsel was Todd R. Overman, Bass, Berry & Sims PLC, Washington,
D.C.
OPINION
HORN, J.
Before the court is protestor’s second motion for a temporary restraining order and
preliminary injunction, in which protestor challenges the decision of the United States
Department of Homeland Security (DHS), Federal Law Enforcement Training Centers
(the Agency), to override the automatic stay of performance required by the Competition
in Contracting Act (CICA), 31 U.S.C. § 3553 (2012), upon protestor’s filing of a bid protest
at the United States Government Accountability Office (GAO).
In protestor’s October 3, 2018 amended complaint, Safeguard Base Operations,
LLC (Safeguard), a joint venture which is the protestor in the above-captioned bid protest,
states in its amended complaint that the Safeguard joint venture is an “unpopulated joint
venture” consisting of Safeguard Security Operations, LLC (SSL) and SRM Group, Inc.
(SRM Group). According to an October 9, 2018 declaration signed by Michael D. Randall,
who states that he is the CEO of SSL, SSL is the fifty-one percent owner of Safeguard
joint venture, and SRM Group is the forty-nine percent owner of the Safeguard joint
venture.
On June 28, 2012, the Agency awarded Contract No. HSFLGL-12-C-00006 to
SRM Group (the SRM Group Contract). Safeguard indicates in its amended complaint in
this court that the 2012 SRM Group Contract required SRM Group to provide “dormitory
maintenance” services at the Federal Law Enforcement Training Center in Glynco,
Georgia. The SRM Group Contract was set-aside for contractors qualified as part of the
Small Business Administration’s (SBA’s) 8(a) program.2 The SRM Group Contract had a
phase-in period of July 1 to July 15, 2012, and a base period of performance beginning
on July 16, 2012 and ending on September 30, 2012. The SRM Group Contract also
contained Federal Acquisition (FAR) § 52.217-9, which stated that “[t]he total duration of
this contract, including the exercise of any options under this clause, shall not exceed 60
months or 5 years.”3 (emphasis in original). According to protestor’s amended complaint
2 “The ‘8(a) program,’ named after Section 8(a) of the Small Business Act, permits the
government to award certain contracts exclusively to small businesses that are certified
as socially and economically disadvantaged.” Hugh B. McClean, The Diversity Rationale
for Affirmative Action in Military Contracting, 66 CATH. U. L. REV. 745, 746 (2017) (citing
15 U.S.C. § 637(a)(1)(B) (2012)).
3 As discussed below, if all option periods of performance in the 2012 SRM Group
Contract were exercised, the SRM Group Contract would have ended on June 30, 2017,
which is five years after performance under the SRM Group Contract began on July 1,
2012. The SRM Group Contract included FAR § 52.217-8, which permitted the Agency
2
and the Agency’s October 2, 2018 Determination and Findings,4 the SRM Group Contract
contained multiple option periods of performance, all of which were exercised by the
Agency. The Agency’s October 2, 2018 Determination and Findings indicates that the
SRM Group Contract, after the exercise of all option periods of performance, originally
was set to expire on June 30, 2017.
In the Agency’s October 2, 2018 Determination and Findings, Ms. Fowler states
that “FAR clause 52.217-8 Option to Extend Services[5] was in the contract and FLETC
[Federal Law Enforcement Training Center] exercised it.” On June 28, 2012, the Agency
issued a three-month extension under FAR § 52.217-8 to the SRM Group Contract, which
extended the SRM Group Contract to September 30, 2017. On September 7, 2017, the
Agency issued a second three-month extension under FAR § 52.217-8 to the SRM Group
Contract, which extended SRM Group’s performance to December 31, 2017. Defendant
and defendant-intervenor assert that the SRM Group Contract with the Agency was
completed on December 31, 2017, when the second three-month extension under FAR
§ 52.217-8 ended.
On October 11, 2017, the Agency issued Request for Proposal No. HSFLGL-17-
R-00001 (the Solicitation) as a “competitive 8(a) Set-Aside.” The Solicitation stated that
award would be made on a “best value” basis, and that the “period of performance of this
contract will be a base period of three (3) months and seven (7) 12-month option periods.”
Under a section titled “Solicitation General Information,” the Solicitation stated: “Pricing
Schedule and Periods of Performance (POP) Service dates for each CLIN [Contract Line
Item Number] are detailed in Section B. Note: Exceptions to line item structure in Section
B may result in a bid not considered for award.” (capitalization in original).
The Solicitation’s performance work statement stated that the Federal Law
Enforcement Center in Glynco, Georgia, is located on approximately 2,000 acres in
southeast Georgia and “is responsible for providing law enforcement officer training to
to extend the SRM Group Contract by six months to December 31, 2017 after the last
option period of performance ended on June 30, 2017.
4 As discussed below, on October 2, 2018, the Agency issued its Determination and
Findings in support of its decision to override the CICA stay in the above-captioned bid
protest. Robin D. Fowler, “Head of the Contracting Activity, Federal Law Enforcement
Training Centers (FLETC),” issued and signed the Agency’s October 2, 2018
Determination and Findings.
5 The version of FAR § 52.217-8 in the SRM Group Contract states:
The Government may require continued performance of any services within
the limits and at the rates specified in the contract. These rates may be
adjusted only as a result of revisions to prevailing labor rates provided by
the Secretary of Labor. The option provision may be exercised more than
once, but the total extension of performance hereunder shall not exceed 6
months.
3
over 95 Partner Organizations and is responsible for providing certain core instructional
law enforcement programs as well as a variety of support services.” The performance
work statement stated that the Glynco, Georgia, Federal Law Enforcement Training
Center “has lodging for approximately 2,093 occupants.” The performance work
statement also stated that:
The Contractor shall provide all labor, supplies, materials, equipment,
including safety and protective gear, repair parts, tools, equipment,
planning, scheduling and coordination, training, licenses, permits,
certificates, insurance, pre-employment screening, reports and files,
management, and supervision necessary to perform dormitory custodial,
desk clerk, locksmith, and maintenance services for nine (9) dormitories,
five (5) student centers, one (1) laundry center and other facilities as
described throughout the Performance Work Statement (PWS).
On November 2, 2017, the Agency completed a Justification and Approval
pursuant to FAR § 6.302-2 (2017), which “extend[ed]” SRM Group’s performance to June
30, 2018. Under FAR § 6.302-2, “[w]hen the agency’s need for the supplies or services
is of such an unusual and compelling urgency that the Government would be seriously
injured unless the agency is permitted to limit the number of sources from which it solicits
bids or proposals, full and open competition need not be provided for.” See FAR § 6.302-
2(a)(2). FAR § 6.302-2 applies when “(1) an unusual and compelling urgency precludes
full and open competition, and (2) delay in award of a contract would result in serious
injury, financial or other, to the Government.” See FAR § 6.302-2(b). The November 2,
2017 Justification and Approval indicated that the Agency was entering “into a six month
contract extension on a basis of other than full and open competition beyond the current
contract period” of SRM Group’s performance. The November 2, 2017 Justification and
Approval asserted that “Dorm Management Services are critical to sustain FLETC’s ability
to train the Federal Law Enforcement Officers. This contract extension will maintain
contract support until a new contract can be awarded.” The November 2, 2017
Justification and Approval also asserted that “[a] lapse in contract support would present
an unacceptable risk to FLETC. Should these critical services become unavailable, it
would have a major, negative impact on the ability of the FLETC to provide critical training
to approximately 95 federal agencies partnered with FLETC.” Defendant asserts that, on
December 31, 2017, “SRM’s contract was over” following the expiration of the two three-
month extensions pursuant to FAR § 52.217-8, and that the November 2, 2017
Justification and Approval, as well as the subsequent Justifications and Approvals
discussed below, did not extend the SRM Group Contract as awarded in 2012. Defendant
asserts:
Solely for the sake of administrative convenience, FLETC effectuated the
sole-source contract actions through “modifications” to SRM’s contract,
even though SRM’s contract had run its course and could not be extended
further after the exercise of the FAR 52.217-8 option. This “modifications”
approach avoided delays that would have been caused by certain pre-
award reviews, generation of new clauses (which could cause pricing
4
impacts), and the need to obtain a temporary waiver from the SBA for a new
award of an 8(a) approved program project to a non-8(a) firm.[6]
(internal references omitted).
According to Safeguard’s second motion for a temporary restraining order and a
preliminary injunction, on March 16, 2018, Safeguard submitted a timely proposal in
response to the Solicitation. On June 12, 2018, the DHS Office of Legislative Affairs
approved of an award under the Solicitation to B&O Joint Venture, LLC (B&O). On June
14, 2018, the Agency notified Safeguard that B&O was the apparent awardee under the
Solicitation.7 In the Agency’s Determination and Findings, Ms. Fowler states that, on June
18, 2018, Safeguard filed a size protest with the Small Business Administration (SBA).
Ms. Fowler also states that, on June 22, 2018, Safeguard filed a pre-award bid protest
with the GAO alleging that the Agency had “conducted an arbitrary and capricious
evaluation.” According to Ms. Fowler, “[a]s a result of these protest actions, FLETC issued
a one-month contract extension to the incumbent contractor, SRM Group, Inc., to
continue services through July 31, 2018.” Indeed, on June 22, 2018, the Agency had
issued a second Justification and Approval pursuant to FAR § 6.302-2 (2018) on the basis
of unusual and compelling urgency, which stated that the Agency was “extend[ing]” SRM
Group’s performance to July 31, 2018.
In the October 2, 2018 Determination and Findings, Ms. Fowler states that, on July
16, 2018, the Agency informed the GAO of its intent to take corrective action by having
the source selection authority reconsider the proposal evaluation results and render a
new award decision. Four days later, on July 20, 2018, Ms. Fowler states that the SBA
determined that the “apparent awardee” under the source selection authority’s first
proposal evaluation, B&O, “was a small business, and therefore was eligible for award.”
Ms. Fowler states that, “[a]t this time,” given the Agency’s voluntary corrective action in
response to Safeguard’s pre-award bid protest at the GAO, “it was necessary for FLETC
to issue another one-month contract extension to the incumbent contractor, SRM Group,
Inc., to continue services through August 31, 2018.” On July 27, 2018, the Agency, again,
issued a Justification and Approval pursuant to FAR § 6.302-2 on the basis of unusual
and compelling urgency, which indicated that the Agency was “extend[ing]” SRM Group’s
performance to August 31, 2018.
Safeguard and the Agency’s Determination and Findings state that, on August 7,
2018, the Agency notified Safeguard that the Agency had selected B&O for award under
the Solicitation. Safeguard asserts that:
On August 14, 2018, DHS sent Safeguard a written post-award debriefing,
which disclosed the following information concerning DHS’ evaluation of
Safeguard’s and B&O’s proposals:
6 Neither the Agency nor defendant cited to a regulation requiring “a temporary waiver
from the SBA for a new award of an 8(a) approved program project to a non-8(a) firm.”
7 B&O is the defendant-intervenor in the above-captioned bid protest.
5
[redacted]
Given the material price advantage of Safeguard’s proposal – despite DHS’
unexplained and irrational upward adjustments to Safeguard’s proposed
price of $67,482,344.97 – Safeguard filed a protest (the “First Post-Award
Protest”) with the GAO, which docketed the protest as B-415588.4.
On August 28, 2018, the Agency sent a notice to the GAO stating:
The agency will take corrective action in response to the protest, and
therefore respectfully requests, that in accordance with its rules, the GAO
dismiss this protest. Specifically, in response to the protestor’s allegations,
the agency discovered that it made mistakes in the consideration of
protestor’s proposal. The agency will correct these errors in a new source
selection decision.
According to Safeguard, the GAO dismissed “the First Post-Award Protest as academic
on August 31, 2018.” In the Agency’s Determinations and Findings, Robin Fowler states
that the contracting officer “suspended performance on the new contract award and then
issued another one-month contract extension to the incumbent contract, SRM Group,
Inc., to continue services through September 30, 2018.” Ms. Fowler’s statement
references that, on August 29, 2018, the Agency issued a fourth Justification and
Approval pursuant to FAR § 6.302-2 on the basis of unusual and compelling urgency,
which stated that the Agency was “extend[ing]” SRM Group’s performance to September
30, 2018.
On September 20, 2018, the Agency sent a letter to Safeguard stating that
Safeguard’s “proposal for the subject solicitation was unsuccessful and that a proposal
revision will not be considered.” The September 20, 2018 letter indicated that “[o]nly one
award was made to” B&O, and that the “total estimated amount” “for the base period and
all options” was $77,734,857.02. According to Safeguard, “Safeguard’s proposed price of
$[redacted] remains over $[redacted] lower than B&O’s proposed price.” (emphasis in
original). The September 20, 2018 letter also stated that:
In general terms, Safeguard Base Operations’ (SBO) price proposal was
determined non-compliant because the price volume failed to include
government provided amounts for the Service Work Request CLINs, which
was required by Amendment 00003 to the solicitation. The government
response to Question Number 9 specifically stated:” [sic] A. For bidding
purposes please include the following “not-to-exceed” amounts in the
applicable CLIN:
CLIN AMOUNT CLIN AMOUNT CLIN AMOUNT
0007AA $124,688.00 3007AA $549,872.00 6007AA $636,546.00
0007AB $ 59,063.00 3007AB $260,466.00 6007AB 0
$301,522.00
6
1007AA $498,750.00 4007AA $577,366.00 7007AA $636,546.00
1007AB $236,250.00 4007AB $273,489.00 7007AB $301,522.00
2007AA $523,688.00 5007AA $606,234.00
2007AB $248,063.00 5007AB $287,163.00
The solicitation further specifically stated the following: “Exceptions to the
line item structure in Section B may result in a bid not considered for award.”
Therefore, Safeguard Base Operations LLC-JV is not eligible for award.
Because there is no other evaluation information to provide, this letter also
serves as your post-award debriefing in accordance with Federal
Acquisition Regulation 15.506.
On September 25, 2018, Safeguard filed a second post-award bid protest of the
Agency’s award under the Solicitation at the GAO. In its second post-award bid protest
at the GAO, Safeguard argues that “DHS conducted an unreasonable and disparate
pricing evaluation,” and that “DHS conducted a flawed best value trade-off.” In its second
motion for a temporary restraining order and preliminary injunction, Safeguard states that
the “GAO issued an Acknowledgment Package and Protective Order on September 26,
2018 indicating that an Agency Report is due by October 25, 2018. GAO’s decision on
the merits is scheduled to be issued by January 3, 2019.” (capitalization in original).
On September 27, 2018, Suresh S. Prabhu, President of SRM Group, sent an
email message to Sheryle Wood, a contracting officer with the DHS, attached to which
was SRM Group’s “Unsolicited Offer to Extend Services on the Housing Project at the
current rates for 1 or 3 months.” (capitalization in original). The attachment provides the
following two options to DHS: “Option 1: Extend Services by 1 month to go the end of
October 2018 at current rates (September 2018 rates) Option 2: Extend Services by 3
month to go the end of December 2018 at current rates (September 2018 rates).”
At 7:04 a.m. on September 28, 2018, contracting officer Sheryle Wood sent an
email message to Ralph Thomas, who appears to be an employee of SRM Group, stating
“[w]e will be holding a phase out/phase in meeting today at 9AM at Townhouse 398. This
will be a joint meeting between B&O JV, SRM Group, SSD, and PRO. Please plan on
attending.” In its second motion for a temporary restraining order and preliminary
injunction, Safeguard states:
On Friday, September 28, 2018, DHS notified SRM personnel that SRM’s
last day of performance would be Sunday, September 30, 2018, and that
DHS wanted all SRM property removed from FLETC premises by the
weekend of September 29, 2018 so that B&O could commence
performance of housing management support services at FLETC in SRM’s
place.
The next day, on September 29, 2018, James Caine, an attorney with DHS, sent
an email message to Diana Curran, who lists herself as of counsel for the protestor in the
7
above-captioned protest. Mr. Caine’s September 29, 2018 email message stated that
“[w]e received your CFC [United States Court of Federal Claims] pre-award filing notice[8]
on the Dormitory Maintenance contract and envision having a D&F [Determination and
Findings] to provide you and GAO as it is in progress and the team is working to complete
it this weekend.”
On September 30, 2018, Safeguard’s contract to provide dormitory maintenance
services to the Agency expired, and, on October 1, 2018, the Agency transitioned to
B&O’s dormitory maintenance services contract with the Agency. Safeguard submitted to
the court an October 2, 2018 declaration signed by Suresh S. Prabhu, 9 who states that
he is the president of SRM Group, in which Mr. Prabhu describes what he considers to
be “the chaos at FLETC” during the Agency’s transition to B&O. According to the
subsequently filed October 2, 2018 declaration signed by Suresh S. Prabhu, “SRM
employed a Project Management team of [redacted] personnel subject to non-compete
clauses as part of their employment contract that prevents them from lawfully being
employed by the currently performing contractor for housing services at FLETC, B&O.”
Safeguard asserts that the Agency’s transition to B&O has “left in place most, if not all, of
SRM’s non-senior incumbent employees.”
On October 1, 2018, Safeguard filed its complaint with this court in the above-
captioned bid protest, which challenged the Agency’s override of the CICA stay while
Safeguard’s second post-award bid protest was pending at the GAO. Safeguard filed a
motion for a temporary restraining order and preliminary injunction that same day. Also
on the same day, October 1, 2018, the court held a hearing with the parties in the above-
captioned bid protest. During the hearing, the court denied Safeguard’s motion for a
temporary restraining order and preliminary injunction, subject to protestor’s renewal, if
appropriate. At the October 1, 2018 hearing, counsel of record for defendant indicated
that the Agency was currently working on finalizing a Determination and Findings to
support its decision to override the CICA stay and that the Agency anticipated issuing the
Determination and Findings by 10:30 a.m., EDT, on October 2, 2018.
On the morning of October 2, 2018, Robin D. Fowler, “Head of the Contracting
Activity, Federal Law Enforcement Training Centers,” issued a Determination and
Findings stating that:
Upon the basis of the following findings, I, Robin D. Fowler, Head of the
Contracting Activity, Federal Law Enforcement Training Centers (FLETC),
have determined that performance of the contract for Dorm Management
Services in support of FLETC Glynco is authorized to proceed in the face
of a Government Accountability Office (GAO) protest (B-415588) filed by
8Safeguard submitted its pre-filing notice to the United States Court of Federal Claims
on the evening of September 28, 2018.
9Safeguard has submitted to the court three declarations signed by Suresh S. Prahbu.
The first declaration is dated September 28, 2018, the second declaration is dated
October 2, 2018, and the third declaration is dated October 13, 2018.
8
Safeguard Base Operations, LLC (SBO) as continuing performance is both
based upon urgent and compelling circumstances that affect the interests
of the United States and that it is also in the best interests of the United
States.
(emphasis in original).
According to Ms. Fowler, Safeguard’s second post-award bid protest at the GAO
contains the two following allegations: 1) that the Agency conducted an unreasonable
and disparate pricing evaluation; and 2) that the Agency conducted a flawed best value
trade-off. Regarding the first allegation, Ms. Fowler alleges that Safeguard, in its proposal
in response to the Solicitation, failed to price a series of Contract Item Line Numbers
(CLINs) “in the amount of $6.1M as specifically directed by the solicitation, as amended.”
Ms. Fowler states that Safeguard’s failure to price the CLINs “rendered their price
proposal non-compliant as offerors were warned could happen.” Regarding Safeguard’s
allegation of a flawed best value trade-off, Ms. Fowler states that Safeguard’s “price
proposal was non-compliant and could not be compared to other prices in a trade-off
analysis. However, they were also not the highest technically evaluated offeror and the
SSA [source selection authority] determined the premium price that would be paid to the
highest rated offeror was the best value to the Government.” Ms. Fowler states that, when
making his decision to override the CICA stay, she consulted with James Caine, “FLETC’s
procurement attorney,” “regarding the merits of the protest that triggered the CICA stay.”
According to Ms. Fowler, based on Mr. Caine’s review of Safeguard’s second post-award
bid protest at the GAO, the Agency’s “position appears to be defensible and well
supported by law and fact.” Ms. Fowler also asserts that, “[e]ven if GAO were to sustain
the protest, however, the interests at risk from delay are so great that they overcome the
risks to the Agency of an adverse ruling by the GAO.”
Under a heading in the Determination and Findings titled “Existing Contract and
Protest,” Ms. Fowler states that the Federal Law Enforcement Training Center “prepares
the federal law enforcement community to safeguard the American people, our homeland,
and our values by providing basic and advanced law enforcement training to more than
ninety-five Federal Partner Organizations.” (capitalization in original). Ms. Fowler asserts
that a “critical part of this training mission is lodging our law enforcement students,” and
that the Federal Law Enforcement Training Center in Glynco, Georgia, currently has nine
on-site dormitories with over 2,000 rooms. Ms. Fowler states, “[a]t this time, there is no
existing contract with the incumbent that may be extended, they have ended the period
of performance of the last extension, and FLETC has fully transitioned to performance by
the awardee.” According to Ms. Fowler, the Agency
cannot do without these services without jeopardizing FLETC’s ability to
train Federal law enforcement officers, including Custom and Border Patrol
and Immigration and Customs Enforcement officer, as well as
Transportation Security Administration airport screeners and could
ultimately impact the ability of our partner organizations to field qualified law
enforcement agents and screeners.
9
Ms. Fowler also states:
In August, 2018, I learned from counsel, that the interested party’s attorneys
had objected to and expressed concern that the bridge contracts that
FLETC executed to obtain services during the protest, were obtained from
a contractor who was not in the 8A program and the acquisition was in the
8A program. Although, a standard practice at FLETC during protests was
awarding bridge contracts to the incumbent, I realized that this was not a
good practice in this case, and was contrary to my obligation to comply with
and fully support the Small Business Administration’s 8A program. This lead
to my decision to not award a new bridge contract to any contractor outside
the 8A program. It takes a total of five days to complete the congressional
notification process required for new awards in excess of one million dollars.
Thus, it was impossible to prepare and award a bridge contract to the
awardee for just the 120-day period required to complete the GAO protest
process in time to avoid doing without these services and jeopardizing
training. Therefore, I had no choice but to override the Stay to ensure
continued performance.
Under a heading in the October 2, 2018 Determination and Findings titled “Basis
for the Stay Override,” Ms. Fowler addresses the Agency’s asserted multiple reasons for
overriding the CICA stay, which include overriding the CICA stay because of urgent and
compelling circumstances and because the override is in the best interests of the United
States. Ms. Fowler alleges that there are “Urgent and Compelling circumstances that
significantly affect the interests of the United States that will not permit waiting for
the GAO decision on the merits of the protest [Safeguard’s second post-award bid
protest at the GAO].” (emphasis in original). Ms. Fowler asserts that “[e]ach extension
has been a separate contract action supported by a Justification and Approval (J&A)
authorizing the continuation of services under the status quo requirements.” Ms. Fowler
argues that SRM Group “is no longer an 8(a) contractor, having graduated approximately
two years ago,” and, “[t]herefore, it is no longer feasible or proper to continue services
under the current contract to a contractor who is not even an 8A contractor.” Ms. Fowler
states that “the only other option vice an override is to forego these vital services
throughout the GAO protest period.” When addressing the alleged urgent and compelling
circumstances, Ms. Fowler asserts:
The impacts, as described in the [October 1, 2018] affidavit of Thomas J.
Walters, Director of FLETC, would be as follows:
1) Adversely impact FLETC training operations and could potentially
lead to classes being cancelled due to lodging disruption;
2) Could cause training to be unaffordable for our Partner Organizations
as we would attempt to use off-center lodging and it would be much
more expensive, and in some cases the Director believes they would
pull students from training as it would be unaffordable;
10
3) Due to upcoming CBP and ICE surge any disruption to lodging at a
time when we are looking for greater lodging capacity by double bunking
and more aggressive commercial lodging could jeopardize ability to
meet the requirements of the surge;
4) FLETC has limited staff and equipment resources and it is not clear
we could adequately clean common areas, issue keys, and maintain the
buildings adequate to meet health and safety needs which may well
result in the loss of the use of these dormitories even if we required
students to clean their own linens and rooms. Taking these steps would
negatively impact training as our training program is demanding, and
does not have student time included in the training schedule for room
and linen cleaning.
Additionally, in the October 1, 2018 affidavit signed by Thomas J. Walters, “Director of
FLETC,” Mr. Walters states that:
FLETC has begun planning efforts to meet the anticipated surge in training
that CBP and ICE will require to meet the hiring goals associated with
Executive Order 13767, Border Security and Immigration Enforcement
Improvements, and Executive Order 13768, Enhancing Public Safety in the
Interior of the United States. To meet the intents of these Executive Orders,
CBP will hire 5,000 Border Patrol Agents and ICE will hire 10,000
Immigration Officers; FLETC will be responsible for training almost all of
them.
(emphasis in original).
Ms. Fowler also asserts that “[c]ontinued performance is in the Best Interests
of the United States.” (emphasis and capitalization in original). Ms. Fowler states:
The corrective actions over the past 3 months have resulted in a monthly
contract extension to the incumbent contractor. The first extension resulted
in an 11% increase over previous prices, which equals to $104,494.15. The
second extension resulted in an additional 7.5% increase, which equals
$20,125.99. Then finally, the third extension resulted in an additional 6%
increase, which equals $30,682.44. In total, FLETC is now paying in excess
of 26% over the original negotiated cost of these services, or $155,372.58
per month. The incumbent, SRM’s current monthly price is $325,979.12
over what we would be paying the awardee if the award were not
suspended as a result of the first protest, and would cause us to expend
close to $1.3 million for the period of the protest more than necessary, had
we continued performance with the incumbent. Thus it would fiscally
irresponsible to continue down this path, rather than continue services
under the newly awarded contract that was determined to offer the best
value to the government and not in the best interests of the Government.
11
Additionally, by overriding the stay of performance, the period of
performance is now long enough for the contractor to begin to implement
double-bunking in two dormitories, which is critical to resolving the shortage
of on-center lodging.
Finally, and most importantly, as stated previously, this is an 8(a)
designated service and the incumbent continuing to perform the work via a
bridge contract (extension) would go against the rules of the 8(a) program.
The awardee had demonstrated they are the most qualified 8A to perform
this work.
Following the Ms. Fowler’s discussion of urgent and compelling circumstances and the
best interests of the United States in the October 2, 2018 Determination and Findings,
under a heading titled “HARM – DAMAGES,” Ms. Fowler states that:
If the Stay of performance continues, the adverse effect could be
catastrophic and it is impossible to quantify the harm that could result from
Federal Law Enforcement Agencies fielding an inadequate number of
officers and airport screeners. However, FLETC’s Chief Financial Officer
informed me the impact of replacing on-center lodging with off-center
lodging, assuming adequate off-center lodging was even available, would
be approximately $20 million over the course of a 120-day extension.
(emphasis and capitalization in original).
The next day, on October 3, 2018, Safeguard filed an amended complaint
reasserting that the Agency’s decision to override the CICA stay was arbitrary and
capricious and contrary to law. In the amended complaint, Safeguard asserted that the
Agency’s October 2, 2018 Determination and Findings “relies almost exclusively on the
rationale deemed irrelevant to a CICA override decision.” Safeguard requests in its
amended complaint a declaration “that Defendant’s decision to override the CICA stay
issued in connection with Safeguard’s pending GAO protest award was arbitrary,
capricious and contrary to law,” a preliminary and permanent injunction, and “[s]uch
further relief as this Court deems just and proper.”
On October 4, 2018, Safeguard filed a second motion for a temporary restraining
order and preliminary injunction. In its October 4, 2018 motion, Safeguard argues that,
because neither of the Agency’s two “justifications is rational or defensible under the four-
factor test established by Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705,
711 (2006), DHS’ override decision is arbitrary, capricious and contrary to law.” Safeguard
“respectfully requests that this Court declare DHS’ CICA stay override to be unjustified
and unlawful and enjoin DHS from proceeding with any further transition to or
performance by B&O during the pendency of Safeguard’s GAO protest.”
On October 15, 2018, defendant and defendant-intervenor filed responses to
Safeguard’s motion for a temporary restraining order and preliminary injunction.
12
Defendant and defendant-intervenor both assert that the Agency’s decision to override
the CICA stay implemented in connection with Safeguard’s second post-award bid protest
was rational, and that the court should not grant Safeguard’s second motion for a
temporary restraining order and preliminary injunction.
On October 16, 2018, defendant filed the administrative record in the above-
captioned protest. On October 17, 2018, the court heard oral argument regarding
Safeguard’s second motion for a temporary restraining order and preliminary injunction.
During the October 17, 2018 oral argument, the issue of whether Safeguard has standing
to challenge the Agency’s decision to override the CICA stay implemented in connection
with Safeguard’s second post-award bid protest at the GAO was discussed. Defendant,
for the first time, indicated that the government thought that Safeguard did not have
standing to maintain its challenge to the Agency’s override in the above-captioned bid
protest.
On October 18, 2018, the parties submitted supplemental filings to the court
addressing Safeguard’s standing. Safeguard argues that, “based on clear precedent from
this Court, Safeguard has standing in this CICA override challenge by mere virtue of its
status as an actual offeror and actual GAO protester in this procurement.” Defendant, in
its brief submission to the court, which was devoid of any serious analysis, concluded
that, “because SBO has failed to demonstrate that it has suffered an ‘injury-in-fact’ as a
result of FLETC’s override decision, SBO does not have standing to challenge that
decision.” Defendant-intervenor, in an equally brief and sparse filing, concluded simply
that “[i]ntervenor concurs with the Defendant that Plaintiff [protestor] does not have
standing.”
On October 24, 2018, the court issued an oral decision in a hearing with the parties.
This decision incorporates and memorializes the October 24, 2018 oral decision.
DISCUSSION
The Tucker Act grants the United States Court of Federal Claims
jurisdiction 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(a)(1) (2012). In order to have standing to sue as an “interested party”
under this provision, a disappointed bidder must show that it suffered competitive injury
or was “prejudiced” by the alleged error in the procurement process. See Todd Constr.,
L.P. v. United States, 656 F.3d 1306, 1315 (Fed. Cir. 2011) (To prevail, a bid protester
must first “‘show that it was prejudiced by a significant error’ (i.e., ‘that but for the error, it
would have had a substantial chance of securing the contract).’” (quoting Labatt Food
Serv., Inc. v. United States, 577 F.3d 1375, 1378, 1380 (Fed. Cir. 2009))); see also Blue
13
& Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1317 (Fed. Cir. 2007); Sci.
Applications Int’l Corp. v. United States, 108 Fed. Cl. 235, 281 (2012); Linc Gov’t Servs.,
LLC v. United States, 96 Fed. Cl. 672, 693 (2010) (“In order to establish standing to sue,
the plaintiff in a bid protest has always needed to demonstrate that it suffered competitive
injury, or ‘prejudice,’ as a result of the allegedly unlawful agency decisions.” (citing Rex
Serv. Corp. v. United States, 448 F.3d 1305, 1308 (Fed. Cir. 2006); Statistica, Inc. v.
Christopher, 102 F.3d 1577, 1580-81 (Fed. Cir. 1996); Vulcan Eng’g Co. v. United States,
16 Cl. Ct. 84, 88 (1988); and Morgan Bus. Assocs., Inc. v. United States, 223 Ct. Cl. 325,
332 (1980))). In order to establish what one Judge on this court has called “allegational
prejudice” for the purposes of standing, the bidder must show that there was a “substantial
chance” it would have received the contract award, but for the alleged procurement error.
See Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. at 675; Hyperion, Inc. v. United
States, 115 Fed. Cl. 541, 550 (2014) (“The government acknowledges that proving
prejudice for purposes of standing merely requires ‘allegational prejudice,’ as contrasted
to prejudice on the merits . . . .”); Bannum, Inc. v. United States, 115 Fed. Cl. 148, 153
(2014); see also Bannum, Inc. v. United States, 404 F.3d 1346, 1358 (Fed. Cir. 2005);
Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1331 (Fed. Cir.), reh’g denied
(Fed. Cir. 2004); Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319
(Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2003); Statistica, Inc. v. Christopher,
102 F.3d at 1581; Archura LLC v. United States, 112 Fed. Cl. 487, 497 (2013); Lab. Corp.
of Am. v. United States, 108 Fed. Cl. 549, 557 (2012). Because standing is a jurisdictional
issue, this showing of prejudice is a threshold issue. See Corus Grp. PLC. v. Int’l Trade
Comm’n, 352 F.3d 1351, 1357 (Fed. Cir. 2003); Myers Investigative & Sec. Servs., Inc.
v. United States, 275 F.3d 1366, 1370 (Fed. Cir. 2002).
In a post-award bid protest, such as the above-captioned bid protest, the “protestor
must ‘establish that it (1) is an actual or prospective bidder, and (2) possesses the
requisite direct economic interest.’” Mgmt. & Training Corp. v. United States, 137 Fed. Cl.
780, 783-84 (2018) (quoting Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed.
Cir. 2006)); see also Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384
(Fed. Cir. 2012) (quoting MCI Telecomms. Corp. v. United States, 878 F.2d 362, 365
(Fed. Cir. 1989)); Timberline Helicopters, Inc. v. United States, No. 18-1474C, 2018 WL
4709765, at *2 (Fed. Cl. Oct. 2, 2018); Contract Servs., Inc. v. United States, 104 Fed.
Cl. 261, 269 (2012).
Although “standing is not often discussed at length in CICA stay override cases,”
see PMTech, Inc. v. United States, 95 Fed. Cl. 330, 348 (2010), several Judges on the
United States Court of Federal Claims have found that, by bidding on a procurement
which was stayed pending a protest at the GAO, a protestor has enough of a direct
economic interest in the stayed procurement and has standing to challenge an override
of the CICA stay in this court. See Supreme Foodservice GmbH v. United States, 109
Fed. Cl. 369, 381 (2013) (evaluating the standing of a protestor challenging an override
of the CICA stay and stating that, “[a]s an actual offeror challenging the award of a
contract before the GAO, there is no question that Supreme [the protestor] is an interested
party for purposes of our court’s jurisdiction”); URS Fed. Servs., Inc. v. United States, 102
Fed. Cl. 664, 670 (2011) (determining that a protestor had standing to challenge an
14
override of a CICA stay implemented in connection with a bid protest at the GAO when
the protestor had bid on the solicitation at issue at the GAO, notwithstanding that the
protestor was not the incumbent contractor), recons. denied, 102 Fed. Cl. 674 (2012);
PMTech, Inc. v. United States, 95 Fed. Cl. at 348; Sierra Military Health Servs., Inc. v.
United States, 58 Fed. Cl. 573, 579 (2003).
In the above-captioned bid protest, Safeguard submitted a proposal in response
to the Solicitation at issue in Safeguard’s second post-award bid protest at the GAO.
Pursuant to CICA, performance of the contract awarded to B&O following the Agency’s
evaluation of proposals received in response to the Solicitation was stayed until the
Agency decided to override the CICA stay. Therefore, Safeguard, as an actual offeror,
has a direct economic interest in the resultant contract issued under the Agency’s
Solicitation and has standing in the above-captioned bid protest to challenge the Agency’s
override of the CICA stay implemented when Safeguard filed its second post-award bid
protest at the GAO. See Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at
381; URS Fed. Servs., Inc. v. United States, 102 Fed. Cl. at 670.
When evaluating a challenge to an agency’s decision to override an automatic
CICA stay, Judges of the United States Court of Federal Claims have differed on whether
the court should apply the test for injunctive relief or the test for a declaratory relief. See
Dyncorp Int’l LLC v. United States, 113 Fed. Cl. 298, 307 (2013) (“This is a topic on which
judges of this court have disagreed.” (citations omitted)); see also PMTech, Inc. v. United
States, 95 Fed. Cl. at 347 (“There is a split in the precedent of this court as to whether
declaratory relief or injunctive relief should be afforded the successful protestor of a CICA
stay override.”). When evaluating challenges to an override decision, certain judges on
the United States Court of Federal Claims have stated that utilizing the four-factor test for
injunctive relief is more appropriate than the test for a declaratory judgment. See Superior
Helicopter LLC v. United States, 78 Fed. Cl. 181, 194 (2007); see also Reilly’s Wholesale
Produce v. United States, 73 Fed. Cl. at 709 n.7. Other judges have indicated that
declaratory relief is more appropriate because allowing “an arbitrary override to insert the
injunctive relief requirements into the process would convert the CICA stay to something
other than what Congress created.” See Supreme Foodservice GmbH v. United States,
109 Fed. Cl. at 397; see also Intelligent Waves, LLC v. United States, 137 Fed. Cl. 623,
628 (2018) (“Because Congress provided the automatic stay as the default, it is not
necessary that additional criteria be met to reinstate a stay that has been overridden by
agency action.”); AT & T Corp. v. United States, 133 Fed. Cl. 550, 557 (2017); URS Fed.
Servs., Inc. v. United States, 102 Fed. Cl. 674, 676 (2012); Nortel Gov’t Sols., Inc. v.
United States, 84 Fed. Cl. 243, 252 (2008); Advanced Sys. Dev., Inc. v. United States,
72 Fed. Cl. 25, 36 (2006); CIGNA Gov’t Servs., LLC v. United States, 70 Fed. Cl. 100,
114 (2006); Chapman Law Firm Co. v. United States, 65 Fed. Cl. 422, 424 (2005).
In the above-captioned bid protest, protestor’s second motion for a temporary
restraining order and a preliminary injunction requests that this court issue a temporary
restraining order and a preliminary injunction. In protestor’s amended complaint, in
addition to requesting a preliminary injunction and a permanent injunction, protestor
requests a declaration “that Defendant’s decision to override the CICA stay issued in
15
connection with Safeguard’s pending GAO protest award was arbitrary, capricious and
contrary to law.” In a previous, unrelated bid protest challenging an agency’s decision to
override a stay, in which the protestor requested both declarative and injunctive relief, the
undersigned granted the protestor’s request for a declaratory judgment and stated that
“the override decision is set aside, and the automatic stay stemming from ATI’s [the
protestor’s] GAO protest is reinstated.” See Automation Techs., Inc. v. United States, 72
Fed. Cl. 723, 731 (2006). In a footnote, the undersigned stated that, “‘[b]ecause the
declaratory judgment will reinstate the stay and vacate the override, having the same
effect as an injunction, the Court does not reach the issue of injunctive relief.’” Id. at 731
n.5 (quoting CIGNA Gov’t Servs., LLC v. United States, 70 Fed. Cl. at 114). The court,
however, need not determine, at this time, which form of relief is more appropriate in the
above-captioned bid protest, because, as discussed below, the court finds that
Safeguard’s bid protest in this court is unlikely to succeed on the merits. See PMTech,
Inc. v. United States, 95 Fed. Cl. at 347 (“In a case where the record does not support a
finding that the agency’s decision is arbitrary or capricious, however, the distinction
between declaratory relief and injunctive relief is of little import.”). In the current protest,
Safeguard has requested injunctive relief and the court has analyzed this protest under
the more rigorous injunctive relief standard.
Regarding protestor’s request for a temporary restraining order and a preliminary
injunction, the granting of a temporary restraining order “is an ‘extraordinary and drastic
remedy,’” GEO Grp., Inc. v. United States, 100 Fed. Cl. 223, 226 (2011) (quoting Mazurek
v. Armstrong, 520 U.S. 968, 972 (1997)), as is the granting of a preliminary injunction.
See Silfab Solar, Inc. v. United States, 892 F.3d 1340, 1345 (Fed. Cir. 2018) (“A
preliminary injunction ‘is an extraordinary remedy.’” (quoting Winter v. Nat. Res. Def.
Council, 555 U.S. 7, 24 (2008)). “The standards for determining whether to grant a
temporary restraining order are the same as those that apply to a motion for a preliminary
injunction.” See Munilla Constr. Mgmt., LLC v. United States, 130 Fed. Cl. 131, 135
(2016); see also OAO Corp. v. United States, 49 Fed. Cl. 478, 480 (2001) (“When
deciding if a TRO [temporary restraining order] is appropriate in a particular case, a court
uses the same four-part test applied to motions for a preliminary injunction.” (quoting W
& D Ships Deck Works, Inc. v. United States, 39 Fed. Cl. 638, 647 (1997))).
To obtain a temporary restraining order or preliminary injunction, the protestor
must carry the burden of establishing entitlement to extraordinary relief based on the
following factors: (1) likelihood of success on the merits of the underlying litigation, (2)
whether irreparable harm is likely if the injunction is not granted, (3) the balance of
hardships as between the litigants, and (4) factors of the public interest. See Trebo Mfg.,
Inc. v. Firefly Equipment, LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014); see also Pharm.
Research and Mfrs. of Am. v. Walsh, 538 U.S. 644, 670 (2003) (requiring a movant for
preliminary injunction to prove that the “probability of success on the merits of its
claims . . . the risk of irreparable harm, the balance of the equities, and the public interest”
weigh in the movant’s favor); Silfab Solar, Inc. v. United States, 892 F.3d at 1345 (citing
Winter v. Nat. Res. Def. Council, 555 U.S. at 24); Abbott Labs. v. Sandoz, Inc., 544 F.3d
1341, 1344 (Fed. Cir. 2008) (citing Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331,
1338-39 (Fed. Cir. 2003)), reh’g and reh’g en banc denied (Fed. Cir. 2009); Somerset
16
Pharms., Inc. v. Dudas, 500 F.3d 1344, 1346 (Fed. Cir. 2007) (“To establish entitlement
to a preliminary injunction a movant must establish a reasonable likelihood of success on
the merits.” (citing Nat’l Steel Car, Ltd. v. Canadian Pac. Ry., Ltd., 357 F.3d 1319, 1325
(Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir. 2004))); U.S. Ass’n of Imps. of
Textiles and Apparel v. U.S. Dep’t of Commerce, 413 F.3d 1344, 1346 (Fed. Cir. 2005)
(citing Zenith Radio Corp. v. United States, 710 F.2d 806, 809 (Fed. Cir. 1983)); Seaborn
Health Care, Inc. v. United States, 55 Fed. Cl. 520, 523-24 (2003); Dynacs Eng’g Co. v.
United States, 48 Fed. Cl. 614, 616 (2001).
The standard of proof required for a temporary restraining order and preliminary
injunction is a preponderance of the evidence, Contracting Consulting Eng’g LLC v.
United States, 103 Fed. Cl. 706, 709 (2012) (citing Bannum, Inc. v. United States, 60 Fed.
Cl. 718, 723-24 (2004)); Bannum, Inc. v. United States, 60 Fed. Cl. at 723-24, or,
demonstration of a fact as “more likely than not.” Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 329 (2007) (citing Herman & MacLean v. Huddleston, 459 U.S. 375,
390 (1983)).
No one factor, taken individually, is necessarily dispositive. . . . [T]he
weakness of the showing regarding one factor may be overborne by the
strength of the others. If the injunction is denied, the absence of an
adequate showing with regard to any one factor may be sufficient, given the
weight or lack of it assigned the other factors.
FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993); see also Belgium v. United
States, 452 F.3d 1289, 1292-93 (Fed. Cir. 2006); SVD Stars II, LLC v. United States, 138
Fed. Cl. 483, 486 (2018); Loch Harbour Grp., Inc. v. United States, 128 Fed. Cl. 294, 300
(2016).
In the above-captioned bid protest, Safeguard is challenging the Agency’s decision
to override the CICA stay that was implemented in connection with Safeguard’s second
post-award bid protest at the GAO. The Administrative Dispute Resolution Act of 1996
(ADRA), Pub. L. No. 104-320, §§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at
28 U.S.C. § 1491(b)(1)–(4) (2012)), amended the Tucker Act to establish a statutory basis
for bid protests in the United States Court of Federal Claims. See Impresa Construzioni
Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001); see
also Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374, 1380 (Fed. Cir.
2012) (explaining that the Tucker Act expressly waives sovereign immunity for claims
against the United States in bid protests). The statute provides that protests of agency
procurement decisions are to be reviewed under APA standards, making applicable the
standards outlined in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and
the line of cases following that decision. See, e.g., Per Aarsleff A/S v. United States, 829
F.3d 1303, 1309 (Fed. Cir. 2016) (“Protests of agency procurement decisions are
reviewed under the standards set forth in the Administrative Procedure Act (‘APA’), see
28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706), ‘by which an agency’s decision is to be
set aside only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law[.]’” (quoting NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159
17
(Fed. Cir. 2004)) (citing PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.
2010))); Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at
1332; Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir.
2010) (“Following passage of the APA in 1946, the District of Columbia Circuit in Scanwell
Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that challenges to awards of
government contracts were reviewable in federal district courts pursuant to the judicial
review provisions of the APA.”); Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,
1329 (Fed. Cir. 2004) (citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d at 864, 868, for its
“reasoning that suits challenging the award process are in the public interest and
disappointed bidders are the parties with an incentive to enforce the law”); Banknote
Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (“Under the
APA standard as applied in the Scanwell line of cases, and now in ADRA cases, ‘a bid
award may be set aside if either (1) the procurement official’s decision lacked a rational
basis; or (2) the procurement procedure involved a violation of regulation or procedure.’”
(quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at
1332)); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319.
When discussing the appropriate standard of review for bid protest cases, the
United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and
(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United
States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See
Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir.) (“‘[T]he proper standard
to be applied [to the merits of] bid protest cases is provided by 5 U.S.C. § 706(2)(A)
[(2006)]: a reviewing court shall set aside the agency action if it is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.”’” (alterations in original)
(quoting Banknote Corp. of Am. v. United States, 365 F.3d at 1350-51 (citing Advanced
Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.), reh’g denied
(Fed. Cir. 2000)))), reh’g and reh’g en banc denied (Fed. Cir. 2013). The statute says that
agency procurement actions should be set aside when they are “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law,” or “without observance of
procedure required by law.” 5 U.S.C. § 706(2)(A), (D) (2012);10 see also Tinton Falls
10 The language of 5 U.S.C. § 706 provides in full:
To the extent necessary to decision and when presented, the reviewing
court shall decide all relevant questions of law, interpret constitutional and
statutory provisions, and determine the meaning or applicability of the terms
of an agency action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed;
and
(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;
18
Lodging Realty, LLC v. United States, 800 F.3d 1353, 1358 (Fed. Cir. 2015); Orion Tech.,
Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir. 2013); COMINT Sys. Corp. v. United
States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We evaluate agency actions according to
the standards set forth in the Administrative Procedure Act; namely, for whether they are
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”
(quoting 5 U.S.C. § 706(2)(A); and Bannum, Inc. v. United States, 404 F.3d at 1351));
Savantage Fin. Servs. Inc., v. United States, 595 F.3d 1282, 1285-86 (Fed. Cir. 2010);
Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009); Axiom Res.
Mgmt., Inc. v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009) (noting arbitrary and
capricious standard set forth in 5 U.S.C. § 706(2)(A), and reaffirming the analysis of
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue
& Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry
is whether the [government]’s procurement decision was “arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.”’” (quoting Bannum, Inc. v. United
States, 404 F.3d at 1351 (quoting 5 U.S.C. § 706(2)(A) (2000)))); NVT Techs., Inc. v.
United States, 370 F.3d at 1159 (“Bid protest actions are subject to the standard of review
established under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 28
U.S.C. § 1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,’ 5
U.S.C. § 706(2)(A) (2000).” (internal citations omitted)); Info. Tech. & Applications Corp.
v. United States, 316 F.3d at 1319 (“Consequently, our inquiry is whether the Air Force’s
procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.’ 5 U.S.C. § 706(2)(A) (2000).”); Synergy Sols., Inc. v. United
States, 133 Fed. Cl. 716, 734 (2017) (citing Banknote Corp. of Am. v. United States, 365
F.3d at 1350); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. at 22; Contracting,
Consulting, Eng’g LLC v. United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short
of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections
556 and 557 of this title or otherwise reviewed on the record of
an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject
to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole
record or those parts of it cited by a party, and due account shall be taken
of the rule of prejudicial error.
5 U.S.C. § 706.
19
case, the agency’s award must be upheld unless it is ‘arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.’” Turner Constr. Co. v. United States,
645 F.3d 1377, 1383 (Fed. Cir.) (quoting PAI Corp. v. United States, 614 F.3d at 1351),
reh’g en banc denied (Fed. Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United
States, 800 F.3d at 1358 (“In applying this [arbitrary and capricious] standard to bid
protests, our task is to determine whether the procurement official’s decision lacked a
rational basis or the procurement procedure involved a violation of a regulation or
procedure.” (citing Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285–86));
Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir.), reh’g
en banc denied (Fed. Cir. 2013); Nat’l Gov’t Servs., Inc. v. United States, 137 Fed. Cl.
715, 735 (2018) (quoting Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed.
Cir. 2009)); McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402 (2013) (“The first step
is to demonstrate error, that is, to show that the agency acted in an arbitrary and
capricious manner, without a rational basis or contrary to law.”); PlanetSpace, Inc. v.
United States, 92 Fed. Cl. 520, 531-32 (“Stated another way, a plaintiff must show that
the agency’s decision either lacked a rational basis or was contrary to law.” (citing Weeks
Marine, Inc. v. United States, 575 F.3d at 1358)), subsequent determination, 96 Fed. Cl.
119 (2010).
The United States Supreme Court has identified sample grounds which can
constitute arbitrary or capricious agency action:
[W]e will not vacate an agency’s decision unless it “has relied on factors
which Congress has not intended it to consider, 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 is so implausible
that it could not be ascribed to a difference in view or the product of agency
expertise.”
Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)); see
also Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d at 1358; F.C.C. v. Fox
Television Stations, Inc., 556 U.S. 502, 552 (2009); Ala. Aircraft Indus., Inc.-Birmingham
v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009), reh’g and reh’g en banc denied
(Fed. Cir. 2010); In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002) (“[T]he agency
tribunal must present a full and reasoned explanation of its decision. . . . The reviewing
court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v. United States,
74 Fed. Cl. 277, 285-86 (2006), appeal dismissed sub nom. Textron, Inc. v. Ocean
Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States Supreme
Court also has cautioned, however, that “courts are not free to impose upon agencies
specific procedural requirements that have no basis in the APA.” Pension Benefit Guar.
Corp. v. LTV Corp., 496 U.S. 633, 654 (1990).
Under an arbitrary or capricious standard, the reviewing court should not substitute
its judgment for that of the agency, but should review the basis for the agency decision to
determine if it was legally permissible, reasonable, and supported by the facts. See Motor
20
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (“The scope of
review under the ‘arbitrary and capricious’ standard is narrow and a court is not to
substitute its judgment for that of the agency.”); see also Turner Constr. Co., Inc. v. United
States, 645 F.3d at 1383; R & W Flammann GmbH v. United States, 339 F.3d 1320, 1322
(Fed. Cir. 2003) (citing Ray v. Lehman, 55 F.3d 606, 608 (Fed. Cir.), cert. denied, 516
U.S. 916 (1995)); Synergy Sols., Inc. v. United States, 133 Fed. Cl. at 735 (citing Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33). “‘“If the
court finds a reasonable basis for the agency’s action, the court should stay its hand even
though it might, as an original proposition, have reached a different conclusion as to the
proper administration and application of the procurement regulations.”’” Weeks Marine,
Inc. v. United States, 575 F.3d at 1371 (quoting Honeywell, Inc. v. United States, 870
F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289,
1301 (D.C. Cir. 1971))); Limco Airepair, Inc. v. United States, 130 Fed. Cl. 544, 550 (2017)
(citation omitted); Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 631 (2014);
Davis Boat Works, Inc. v. United States, 111 Fed. Cl. 342, 349 (2013); Norsat Int’l
[America], Inc. v. United States, 111 Fed. Cl. 483, 493 (2013); HP Enter. Servs., LLC v.
United States, 104 Fed. Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United
States, 101 Fed. Cl. 765, 780 (2011).
Stated otherwise by the United States Supreme Court:
Section 706(2)(A) requires a finding that the actual choice made was not
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.” To make this finding the court must consider whether the decision
was based on a consideration of the relevant factors and whether there has
been a clear error of judgment. Although this inquiry into the facts is to be
searching and careful, the ultimate standard of review is a narrow one. The
court is not empowered to substitute its judgment for that of the agency.
Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (internal citations
omitted), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see
also U.S. Postal Serv. v. Gregory, 534 U.S. 1, 6-7 (2001); Bowman Transp., Inc. v.
Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956
(1975); Co-Steel Raritan, Inc. v. Int’l Trade Comm’n, 357 F.3d 1294, 1309 (Fed. Cir. 2004)
(In discussing the “arbitrary, capricious, and abuse of discretion, or otherwise not in
accordance with the law” standard, the Federal Circuit stated: “the ultimate standard of
review is a narrow one. The court is not empowered to substitute its judgment for that of
the agency.”); In re Sang Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v.
United States, 216 F.3d at 1058 (“The arbitrary and capricious standard applicable here
is highly deferential. This standard requires a reviewing court to sustain an agency action
evincing rational reasoning and consideration of relevant factors.” (citing Bowman
Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &
Space Co. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); By Light Prof’l IT Servs., Inc. v.
United States, 131 Fed. Cl. 358, 366 (2017); BCPeabody Constr. Servs., Inc. v. United
States, 112 Fed. Cl. 502, 508 (2013) (“The court ‘is not empowered to substitute its
judgment for that of the agency,’ and it must uphold an agency’s decision against a
21
challenge if the ‘contracting agency provided a coherent and reasonable explanation of
its exercise of discretion.’” (internal citations omitted) (quoting Keeton Corrs., Inc. v.
United States, 59 Fed. Cl. 753, 755, recons. denied, 60 Fed. Cl. 251 (2004); and Axiom
Res. Mgmt., Inc. v. United States, 564 F.3d at 1381)), appeal withdrawn, 559 F. App’x
1033 (Fed. Cir. 2014); Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 382;
Alamo Travel Grp., LP v. United States, 108 Fed. Cl. 224, 231 (2012); ManTech
Telecomms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 63 (2001), aff’d, 30 F.
App’x 995 (Fed. Cir. 2002); Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl. 388, 392
(1999) (“Courts must give great deference to agency procurement decisions and will not
lightly overturn them.” (citing Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743-44
(1985))), appeal dismissed, 6 F. App’x 867 (Fed. Cir. 2001), and superseded by regulation
as recognized in MVS USA, Inc. v. United States, 111 Fed. Cl. 639 (2013).
According to the United States Court of Appeals for the Federal Circuit:
Effective contracting demands broad discretion. Burroughs Corp. v. United
States, 223 Ct. Cl. 53, 617 F.2d 590, 598 (1980); Sperry Flight Sys. Div. v.
United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,
Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater
Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69
(1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d, 914
F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good
deal of discretion in determining which bid is the most advantageous to the
Government.” Tidewater Management Servs., 573 F.2d at 73, 216 Ct. Cl.
69.
Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958-59; see also Res-Care, Inc. v.
United States, 735 F.3d 1384, 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal
procurement entity, has ‘broad discretion to determine what particular method of
procurement will be in the best interests of the United States in a particular situation.’”
(quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009))), reh’g
en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995
(Fed. Cir. 1996); Geo-Med, LLC v. United States, 126 Fed. Cl. 440, 449 (2016); Cybertech
Grp., Inc. v. United States, 48 Fed. Cl. 638, 646 (2001) (“The court recognizes that the
agency possesses wide discretion in the application of procurement regulations.”);
Furthermore, according to the United States Court of Appeals for the Federal Circuit:
Contracting officers “are entitled to exercise discretion upon a broad range
of issues confronting them in the procurement process.” Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,
procurement decisions are subject to a “highly deferential rational basis
review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.
Cir. 2008) (internal quotation marks omitted).
PAI Corp. v. United States, 614 F.3d at 1351; see also AgustaWestland N. Am., Inc. v.
22
United States, 880 F.3d 1326, 1332 (Fed. Cir. 2018) (“Where, as here, a bid protester
challenges the procurement official’s decision as lacking a rational basis, we must
determine whether ‘the contracting agency provided a coherent and reasonable
explanation of its exercise of discretion,’ recognizing that ‘contracting officers are entitled
to exercise discretion upon a broad range of issues confronting them in the procurement
process.’” (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238
F.3d at 1332-33 (internal quotation marks and citation omitted))); Weeks Marine, Inc. v.
United States, 575 F.3d at 1368-69 (“We have stated that procurement decisions ‘invoke
[ ] “highly deferential” rational basis review.’ Under that standard, we sustain an agency
action ‘evincing rational reasoning and consideration of relevant factors.’” (alteration in
original) (quoting CHE Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting
Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1058))).
A disappointed bidder has the burden of demonstrating the arbitrary and capricious
nature of the agency decision by a preponderance of the evidence. See Tinton Fall
Lodging Realty, LLC v. United Sates, 800 F.3d at 1364; see also Grumman Data Sys.
Corp. v. Dalton, 88 F.3d at 995-96; Enhanced Veterans Sols., Inc. v. United States, 131
Fed. Cl. 565, 578 (2017); Davis Boat Works, Inc. v. United States, 111 Fed. Cl. at 349;
Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 340. The Federal
Circuit has indicated that “[t]his court will not overturn a contracting officer’s determination
unless it is arbitrary, capricious, or otherwise contrary to law. To demonstrate that such a
determination is arbitrary or capricious, a protester must identify ‘hard facts’; a mere
inference or suspicion . . . is not enough.” PAI Corp. v. United States, 614 F.3d at 1352
(citing John C. Grimberg Co. v. United States, 185 F.3d 1297, 1300 (Fed. Cir. 1999)); see
also Turner Constr. Co., Inc. v. United States, 645 F.3d at 1387; Sierra Nevada Corp. v.
United States, 107 Fed. Cl. 735, 759 (2012); Filtration Dev. Co., LLC v. United States, 60
Fed. Cl. 371, 380 (2004).
A bid protest proceeds in two steps. First . . . the trial court determines
whether the government acted without rational basis or contrary to law when
evaluating the bids and awarding the contract. Second . . . if the trial court
finds that the government’s conduct fails the APA review under 5 U.S.C.
§ 706(2)(A), then it proceeds to determine, as a factual matter, if the bid
protester was prejudiced by that conduct.
Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs. Corp. v.
United States, Fed. Cl. 550, 555 (2017); FirstLine Transp. Sec., Inc. v. United States, 119
Fed. Cl. 116, 126 (2014), appeal dismissed (Fed. Cir. 2015); Eco Tour Adventures, Inc.
v. United States, 114 Fed. Cl. at 22; Archura LLC v. United States, 112 Fed. Cl. at 496.
To prevail in a bid protest case, the protestor not only must show that the government’s
actions were arbitrary, capricious, or otherwise not in accordance with the law, but the
protestor also must show that it was prejudiced by the government’s actions. See 5 U.S.C.
§ 706 (“[D]ue account shall be taken of the rule of prejudicial error.”); see also Glenn Def.
Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid protest case, the
inquiry is whether the agency’s action was arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law and, if so, whether the error is prejudicial.”); IT
23
Enter. Sols. JV, LLC v. United States, 132 Fed. Cl. 158, 173 (2017) (citing Bannum v.
United States, 404 F.3d at 1357-58); Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl.
672, 694-96 (2010). In describing the prejudice requirement, the Federal Circuit also has
held that:
To prevail in a bid protest, a protester must show a significant, prejudicial
error in the procurement process. See Statistica, Inc. v. Christopher, 102
F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d
1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not
required to show that but for the alleged error, the protester would have
been awarded the contract.” Data General, 78 F.3d at 1562 (citation
omitted). Rather, the protester must show “that there was a substantial
chance it would have received the contract award but for that error.”
Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d
1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, protester
must demonstrate that but for the alleged error, “‘there was a substantial
chance that [it] would receive an award--that it was within the zone of active
consideration.’”) (citation omitted).
Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g denied
(Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d
at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en
banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 316 F.3d
at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at
1332-33; OMV Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000);
Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile
Networks USA, LLC v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).
In Data General Corp. v. Johnson, the United States Court of Appeals for the
Federal Circuit wrote:
We think that the appropriate standard is that, to establish prejudice, a
protester must show that, had it not been for the alleged error in the
procurement process, there was a reasonable likelihood that the protester
would have been awarded the contract . . . . The standard reflects a
reasonable balance between the importance of (1) averting unwarranted
interruptions of and interferences with the procurement process and (2)
ensuring that protesters who have been adversely affected by allegedly
significant error in the procurement process have a forum available to vent
their grievances. This is a refinement and clarification of the “substantial
chance” language of CACI, Inc.-Fed. [v. United States], 719 F.2d at 1574.
Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.), reh’g denied, en banc
suggestion declined (Fed. Cir. 1996); see also Glenn Def. Marine (ASIA), PTE Ltd. v.
United States, 720 F.3d at 912; Bannum, Inc. v. United States, 404 F.3d at 1353, 1358
(“The trial court was required to determine whether these errors in the procurement
24
process significantly prejudiced Bannum . . . . To establish ‘significant prejudice’ Bannum
must show that there was a ‘substantial chance’ it would have received the contract award
but for the [government’s] errors” in the bid process. (citing Info. Tech. & Applications
Corp. v. United States, 316 F.3d at 1319; Alfa Laval Separation, Inc. v. United States,
175 F.3d at 1367; Statistica, Inc. v. Christopher, 102 F.3d at 1581; and Data Gen. Corp.
v. Johnson, 78 F.3d at 1562); see also Todd Constr., L.P. v. United States, 656 F.3d
1306, 1315 (Fed. Cir. 2011); Advanced Data Concepts, Inc. v. United States, 216 F.3d at
1057 (using a “reasonable likelihood” rule); Stratos Mobile Networks USA, LLC v. United
States, 213 F.3d at 1380 (using a “substantial chance” test); Am. Corr. Healthcare, Inc.
v. United States, 137 Fed. Cl. 395, 410 (2018) (using a “substantial chance” test); Vintage
Autoworks, Inc. v. United States, 132 Fed. Cl. 143, 149 (2017) (using a “substantial
chance” test); Active Network, LLC v. United States, 130 Fed. Cl. 421, 427 (2017) (using
a “substantial chance” test); Archura LLC v. United States, 112 Fed. Cl. at 496 (using a
“substantial chance” test); Info. Scis. Corp. v. United States, 73 Fed. Cl. 70, 96 (2006)
(using a “substantial chance” test), recons. in part, 75 Fed. Cl. 406 (2007).
In the above-captioned bid protest, on September 25, 2018, Safeguard filed its
second post-award bid protest at the GAO, in which Safeguard requested that “GAO
PROMPTLY NOTIFY DHS OF THE FILING OF THIS PROTEST AND THAT DHS BE
DIRECTED TO STAY PERFORMANCE OF THIS AWARD UNTIL THIS PROTEST IS
RESOLVED PURSUANT TO 4 C.F.R. § 21.6.” (capitalization and emphasis in original).
On October 2, 2018, Robin Fowler, “Head of the Contracting Activity, Federal Law
Enforcement Training Centers,” issued the Agency’s Determination and Findings for the
override, which stated that the Agency was overriding the CICA stay “both based upon
urgent and compelling circumstances that affect the interests of the United States and
that it is also in the best interests of the United States.”
Under CICA’s automatic stay, agencies, upon receiving notice that the award is
being protested, are to “direct the contractor to cease performance under the contract
and to suspend any related activities that may result in additional obligations being
incurred by the United States under that contract.” See 31 U.S.C. § 3553(d)(3)(A)(ii)(2).
CICA gives the Agency certain options to override a CICA stay, and, in the above-
captioned bid protest, the Agency did so. CICA provides:
(C) The head of the procuring activity may authorize the performance of the
contract (notwithstanding a protest of which the Federal agency has notice
under this section)--
(i) upon a written finding that--
(I) performance of the contract is in the best
interests of the United States; or
(II) urgent and compelling circumstances that
significantly affect interests of the United States
will not permit waiting for the decision of the
25
Comptroller General concerning the protest;
and
(ii) after the Comptroller General is notified of that finding.
31 U.S.C. § 3553(d)(3)(C).
Regarding override decisions, the United States Court of Appeals for the Federal
Circuit has determined that “28 U.S.C. § 1491(b)(1) grants the trial court jurisdiction over
an objection to a violation of 31 U.S.C. § 3553(c)(2).” RAMCOR Servs. Grp., Inc. v. United
States, 185 F.3d 1286, 1290 (Fed. Cir. 1999); see also Dyncorp Int’l LLC v. United States,
113 Fed. Cl. at 302 (“We have jurisdiction under the Tucker Act, 28 U.S.C. § 1491(b)
(2006), to review an agency decision to override a CICA stay.” (citing RAMCOR Servs.
Grp., Inc. v. United States, 185 F.3d at 1289-90)); Beechcraft Def. Co., LLC v. United
States, 111 Fed. Cl. 24, 31 (2013); Supreme Foodservice GmbH v. United States, 109
Fed. Cl. at 381 (“Challenges to alleged violations of the CICA automatic stay provision
are within this jurisdiction.” (citing RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d
at 1290)).
Although not binding on this court, a template for evaluating an override
determination was offered by a Judge of this court in Reilly’s Wholesale Produce v. United
States, 73 Fed. Cl. 705 (2006).11 See Supreme Foodservice GmbH v. United States, 109
Fed. Cl. at 384 (“In Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705 (2006),
one judge of our court surveyed the field of prior decisions and was able ‘to distill from
the relevant cases a variety of factors that an agency must consider in making an override
decision.’” (quoting Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. at 711)); but
see PMTech, Inc. v. United States, 95 Fed. Cl. at 343 (“The court in Reilly’s Wholesale
has provided excellent guidance to this court, and to the procurement community, in
identifying factors that may be relevant to most CICA stay override decisions. As to the
precedential weight to be accorded the Reilly’s Wholesale factors, however, the court in
this decision must express some reservations.”). Override protests, however, are very
fact specific inquiries. See PMTech, Inc. v. United States, 95 Fed. Cl. at 344 (quoting
Automation Techs., Inc. v. United States, 72 Fed. Cl. at 727); Automation Techs., Inc. v.
United States, 72 Fed. Cl. at 727, 730. As explained in Beechcraft Defense Co., LLC, the
Reilly’s Wholesale court identified four factors to consider:
(1) “whether significant adverse consequences will necessarily occur if the
stay is not overridden”; (2) “whether reasonable alternatives to the override
exist that would adequately address the circumstances presented”; (3) “how
the potential cost of proceeding with the override, including the costs
associated with the potential that the GAO might sustain the protest,
11As indicated by the same Judge who issued the Reilly’s Wholesale decision, “‘the
decisions of this court are not binding precedent for judges of this court.’” Park Props.
Assocs., L.P. v. United States, 120 Fed. Cl. 787, 790 (2015) (quoting Sotera Def.
Solutions, Inc. v. United States, 118 Fed. Cl. 237, 258 (2014)), aff’d, 677 F. App’x 676
(Fed. Cir. 2017).
26
compare to the benefits associated with the approach being considered for
addressing the agency’s needs”; and (4) “the impact of the override on
competition and integrity of the procurement system.”
Beechcraft Defense Co., LLC v. United States, 111 Fed. Cl. at 31 (quoting Reilly’s
Wholesale Produce v. United States, 73 Fed. Cl. at 711); see also Supreme Foodservice
GmbH v. United States, 109 Fed. Cl. at 384. The court in Reilly’s Wholesale Produce
further stated that the “decisional law also indicates that certain factors are irrelevant to
this analysis, among them: (i) that the new contract would be better than the old one . . .
or (ii) the override and continuation of the contract is otherwise simply preferable to the
agency . . . .” Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. at 711.
In discussing Reilly’s Wholesale, although a Judge of this court argued that “[t]he
court’s focus should be on whether the CICA stay override decision was rational and
whether the agency considered relevant factors, not on whether the agency conformed
its analysis to a specific framework elaborated by this court,” the Judge, nonetheless
acknowledged “the court recognizes the utility of the analytical framework provided by
Reilly’s Wholesale, but does not consider that the Reilly’s Wholesale factors govern the
outcome of this case.” PMTech, Inc. v. United States, 95 Fed. Cl. at 345. Likewise, the
undersigned is not bound by the Reilly’s Wholesale factors, but believes the factors are
a useful tool to help analyze the Agency’s decision to override the automatic stay based
on urgent and compelling circumstances in the context of APA review. See 5 U.S.C. §
706(2)(A).
The court in Reilly’s Wholesale Produce v. United States set forth an analytical
framework that was based on “a variety of factors that an agency must consider in making
an override decision based upon urgent and compelling circumstances.” 12 Reilly’s
Wholesale Produce v. United States, 73 Fed. Cl. at 711. The factors articulated in Reilly’s
Wholesale Produce v. United States “have been applied when the stay override is based
upon urgent and compelling circumstances, or based upon the best interests of the United
States.”13 Charles F. Day & Assocs., LLC v. United States, 120 Fed. Cl. 767, 771 (2015);
12 In a footnote, the court in Reilly’s Wholesale Produce v. United States stated:
Admittedly, some of the cases cited for the factors that are legally relevant
and irrelevant in this context are ones in which the agency override decision
was based upon the “best interests” of the United States. However, in the
court’s view, the rationale employed in those cases has, where indicated,
application to the review of an override decision based upon urgent and
compelling circumstances.
Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. at 711 n.10.
13 In Dyncorp Int’l LLC v. United States, a Judge of the United States Court of Federal
Claims declined to apply the factors set forth in Reilly’s Wholesale Produce v. United
States to an agency’s override of the CICA stay “in the context of a ‘best interest’
justification.” See Dyncorp Int’l LLC v. United States, 113 Fed. Cl. at 303 n.4. The Dyncorp
27
see also Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 384 (noting that
the factors articulated in Reilly’s Wholesale Produce v. United States “have been
employed in cases reviewing overrides based on either justification”); E-Mgmt.
Consultants, Inc. v. United States, 84 Fed. Cl. 1, 6 (2008) (applying the Reilly’s Wholesale
Produce v. United States factors to an agency’s decision to override the CICA stay, in
which the agency justified the override decision as being in the “best interests of the
United States”). The undersigned is not bound by the Reilly’s Wholesale factors when
evaluating the Agency’s best interests justification for overriding the CICA stay, but
believes that the Reilly’s Wholesale factors are a useful analytical tool for evaluating
whether the Agency’s best interests justification was “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” See 5 U.S.C. § 706(2)(A).
In Safeguard’s second motion for a temporary restraining order and preliminary
injunction, Safeguard asserts that “Safeguard is extraordinarily likely to succeed on the
merits of this challenge.” Safeguard asserts that “[r]elevant case law clarifies that, in the
context of an ‘urgent and compelling’ justification, ‘adverse consequences’ are those
giving rise to a ‘threat of immediate harm to health, welfare, or safety.’” (citing Supreme
Foodservice GmbH v. United States, 109 Fed. Cl. at 387). Safeguard contends that the
Agency has failed to show any adverse consequences because
DHS’ primary reasoning is that any delay in performance of B&O’s contract
might lead to the cancellation of certain classes at FLETC, which could lead
to less expertise among law enforcement personnel. Respectfully, this
chain-link of alleged possible consequences facially does not reflect a threat
of immediate harm to health, welfare, or safety.
(emphasis in original). Safeguard asserts that, “[e]ven assuming, arguendo, that the D&F
alleges legally sufficient ‘urgent and compelling circumstances,’ the D&F fails because
any adverse consequences are of DHS’ own making in failing to extend SRM’s
performance.” (emphasis in original).
Safeguard also argues that “[t]here is no support for the D&F’s assertion that a
further bridge contract would not be ‘feasible or proper.’” (internal reference omitted).
According to Safeguard, the Agency did not “even attempt to quantify the economic harm
to DHS if Safeguard’s GAO protest is sustained,” but only asserted that, “in Mr. Caine’s
opinion, DHS will win the protest.” Regarding the Agency’s position that overriding the
CICA stay in the above-captioned bid protest was in the “best interests” of the United
States, Safeguard argues that the costs savings identified in the Agency’s Determination
and Findings is “mathematically erroneous.” In support of its position that the costs
Int’l LLC court stated that the Reilly’s Wholesale Produce v. United States test
“overstates what is required by the arbitrary and capricious standard particularly in the
context of a ‘best interest’ justification.” See id. The Dyncorp Int’l LLC court stated that
the “test for evaluating the merits of an agency's override decision is whether the agency's
determination was arbitrary, capricious, or otherwise not in accordance with law.” Id. at
302 (footnote omitted) (citing 5 U.S.C. § 706 (2012)).
28
savings are incorrect, Safeguard cites to the October 2, 2018 declaration signed by
Suresh S. Prabhu, who alleges that the amount B&O is billing the Agency for dormitory
maintenance services “is higher than what SRM has been charging under its recent
extension contracts and would be charging had DHS issued a further bridge contract.”
(emphasis in original). Additionally Safeguard argues that, “[p]erhaps more important,
case law from this Court clarifies that an agency cannot justify a CICA override based on
the ‘best interests of the United States’ by relying on an alleged cost difference of this
sort.” (citing Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. at 31). According to
Safeguard, the October 2, 2018 Determination and Findings does not address the impact
of overriding the CICA stay on the integrity of the procurement system because “there is
no reasonable argument that DHS’ conduct benefits the procurement system and protects
CICA’s important goals. It plainly does the opposite.”
Safeguard argues that Safeguard will be irreparably harmed if injunctive relief is
not granted because “SRM’s contract with FLETC is ‘SRM’s largest source of revenue’
and ‘the immediate loss of SRM’s major source of revenue will further prejudice
Safeguard if it is required quickly, and expensively, to hire new employees for this work
following a reversal of DHS’ award decision in favor of B&O.’” (quoting the September 28,
2018 declaration signed by Suresh S. Prabhu). Safeguard contends that the harm to
Safeguard outweighs the harm to the Agency and B&O because “DHS already has
executed several contract extensions with SRM for the services in question,” and,
critically, DHS and B&O have represented to this Court that the transition to
B&O took place virtually overnight on Sunday, September 30, 2018.
Accordingly, DHS and B&O must concede that B&O’s transition just as
readily could be unwound, and that Safeguard could transition back if and
when this Court enjoins performance of B&O’s protested contract.
Safeguard further contends that the issuance of a temporary restraining order or a
preliminary injunction is in the public interest because the public interest would be served
if the Agency was permitted to ignore the “important statutory mandate” in CICA.
Defendant, however, contends that “the record shows that FLETC had a rational
basis for finding urgent and compelling circumstances to override the CICA stay.”
According to defendant, the Determination and Findings identified significant adverse
consequences that would result if the Agency did not override the CICA stay because
“Mr. Walters [in his role as Director of FLETC] testified that any reduction in FLETC’s
training capacity and output of fully trained and qualified officers and agents translates
directly into federal law enforcement agencies not having fully trained personnel to
conduct law enforcement functions critical to the safety and security of our nation.”
Defendant argues that “Mr. Walters confirmed that ‘FLETC simply does not have
adequate resources to replace all of the services provided by the contract,’” and that,
“[b]ecause FLETC is fully booked for the entire year, ‘a slowdown in current training
means that some quantity of training already scheduled for the fiscal year would be
displaced.’” (quoting the October 1, 2018 affidavit signed by Thomas J. Walters).
According to defendant, “Mr. Walters concluded that ‘delaying the deployment of new
29
federal law enforcement personnel to their duty stations because they were not able to
receive required basic training creates a significant risk to public safety and security.’”
Defendant notes that, “on four separate occasions, in connection with justifying sole-
source procurement actions (to SRM’s benefit) made ‘unusual and compelling urgency’
determinations with respect to the services at issue.”
Defendant asserts that the Agency “had no reasonable alternatives” to overriding
the CICA stay because SRM Group’s contract for dormitory maintenance services with
the Agency had expired in 2017 and, as the October 2, 2018 Determination and Findings
indicates, a “further bridge contract [was] not possible.” Defendant, however, also
contends that the Agency was not required to award SRM Group a bridge contract, and
that the Agency could not award a bridge contract for dormitory maintenance services
because “there was no time to comply with the congressional 5-day notification
requirement given the filing of SBO’s second protest on September 25, 2018 and the
expiration of SRM’s bridge contract on September 30, 2018.” Defendant asserts that “the
only contract vehicle that was available was the newly-awarded contract to B&O, for
which FLETC already had provided the requisite Congressional notification.” Defendant
also asserts that, in the Determination and Findings, the Agency considered Safeguard’s
second post-award bid protest and “correctly determined that there was little potential
cost of proceeding with the override.” According to defendant:
SBO asserts that because FLETC previously considered its incomplete
proposal, it is precluded now from determining the proposal should have
been excluded. In fact, the error that SBO noted in its first post-award
protest filed on August 20, 2018, was that FLETC improperly adjusted
SBO’s prices in part to add in those missing CLINs. SBO was correct that it
was improper for the agency to adjust SBO’s prices after its price realism
analysis, an adjustment prohibited in competitions for firm fixed prices by
FAR 15.404-1(d)(3). FLETC promptly took corrective action. In its
reevaluation, recognizing that due to SBO’s August 2018 protest that the
agency was powerless to adjust SBO’s proposed price for failure to include
the not-to-exceed amounts for CLINs XX7AA and XXX7AA, FLETC
properly determined that it could not consider the proposal for award. Now,
in its September 25, 2018, protest, SBO complains that it was improper for
FLETC to not adjust its prices.
(emphasis in original).
Defendant further contends that the Determination and Findings did consider the
integrity of the procurement system and explained “that allowing B&O, an 8(a) contractor
twice awarded this contract, to proceed is preferable to issuing a fifth FAR 6.302-3 J&A
in support of keeping in place a non-8(a) contractor whose contract expired 15 months
ago (9 months ago if you include the FAR 52.217-8 option).” Defendant asserts that
Safeguard has not established irreparable harm because
“the evidentiary record in this case makes clear that the stay of performance
30
that [SBO] seeks here would leave [SBO] in exactly the same position that
[SBO] would be in if the Court were to deny the requested relief, [SBO] is
and would remain an unsuccessful offeror for a contract [sic] has been
previously awarded to [B&O].”
(first, second, third, fourth, and sixth alteration added by defendant) (quoting Treadwell
Corp. v. United States, 133 Fed. Cl. 371, 383 (2017), aff’d, 726 F. App’x 826 (Fed. Cir.
2018)).
Defendant-intervenor, B&O, asserts that the Agency’s decision to override the
CICA stay was “proper under both the urgent and compelling circumstances and the best
interest justifications.” Defendant-intervenor argues that the Agency had no reasonable
alternative to overriding the CICA stay because “there was no time to comply with the
Congressional notification requirement before services were required,” and, “had FLETC
attempted to extend SRM’s performance by a fifth FAR 6.302-2 action, that determination
would have been subject to challenge given that there were qualified 8(a) companies
ready and able to perform that work. Not only was it not possible, it was not required.”
Defendant-intervenor also argues that the Agency’s “override was in the best interests of
the Government” because:
[A] stay of performance would have had the adverse consequences noted
in the Affidavit from FLETC’s Director supporting the override
determination, including the “significant potential” for consequences
“affecting the national security of the Nation,” FLETC’s best interests
justification for the override was more than sufficient. Plaintiff’s argument
that other stated reasons for the override in the D&F are lacking – that
Intervenor’s firm fixed monthly price of [redacted] is lower than the price of
Plaintiff’s minority owner, or because FLETC did not feel it appropriate to
have a non-8(a) continue to perform an 8(a) requirement does not change
the fact that FLETC’s need to avoid the service interruption that would have
resulted from the implementation of the stay was a sufficient basis for its
action.
Regarding plaintiff’s request for a temporary restraining order and preliminary
injunction, defendant-intervenor asserts:
Plaintiff’s claim of harm it would suffer should an injunction not be issued is
flawed for three reasons: (1) it muddles economic harm it may suffer with
harm that SRM may suffer, (2) confuses harm that would be caused by the
end of SRM’s contract with harm, if any, caused if the override decision is
not enjoined, and (3) claims harm it would incur should it not be awarded
the contract. Those harms are not relevant to the question of whether the
Plaintiff will suffer harm if the override is not enjoined.
(emphasis in original). Additionally, defendant-intervenor contends that “it is clear that
imposing an injunction that required FLETC to halt performance or to reinstall SRM, in
31
addition to being unsupported, would cause greater harm to the Government and the
Intervenor than allowing Intervenor to continue performing would cause to Plaintiff”
because of the “interruption” an injunction would have on “this important work.”
In the Agency’s October 2, 2018 Determination and Findings, Robin D. Fowler
states:
Upon the basis of the following findings, I, Robin D. Fowler, Head of the
Contracting Activity, Federal Law Enforcement Training Centers (FLETC),
have determined that performance of the contract for Dorm Management
Services in support of FLETC Glynco is authorized to proceed in the face
of a Government Accountability Office (GAO) protest (B-415588) filed by
Safeguard Base Operations, LLC (SBO) as continuing performance is both
based upon urgent and compelling circumstances that affect the interests
of the United States and that it is also in the best interests of the United
States.
(emphasis in original).
Under a heading titled “Existing Contract and Protest,” Ms. Fowler recounts the
history of SRM Group’s provision of dormitory maintenance services to the Agency. Ms.
Fowler notes that the period of performance under the original SRM Group Contract, as
awarded on June 28, 2012, began on July 1, 2012 and ended on June 30, 2017. Ms.
Fowler states that “FAR clause 52.217-8 Option to Extend Services was in the [SRM
Group] contract and FLETC exercised it, thus extending the period of performance an
additional six months to December 31, 2017.” Ms. Fowler notes that SRM Group’s
performance was extended for a second time when, on November 2, 2017, the Agency
had issued a Justification and Approval pursuant to FAR § 6.302-2 stating that the Agency
was entering “into a six month contract extension on a basis of other than full and open
competition beyond the current contract period” to December 31, 2017. The November
2, 2017 Justification and Approval alleges that “Dorm Management Services are critical
to sustain FLETC’s ability to train the Federal Law Enforcement Officers. This contract
extension will maintain contract support until a new contract can be awarded.” Ms. Fowler
references that SRM Group’s performance was extended for a third time on June 22,
2018, when the Agency had issued another Justification and Approval pursuant to FAR
§ 6.302-2 on the basis of unusual and compelling urgency. The June 22, 2018
Justification and Approval states that the Agency was “[e]xtending the period of
performance” for the SRM Group Contract to July 31, 2018 and indicates that “[a] lapse
in contract support would present an unacceptable risk to the FLETC. Should these
critical services become unavailable, it would have a major, negative impact on the ability
of the FLETC to provide critical training to approximately 95 federal agencies partnered
with the FLETC.”
In the October 2, 2018 Determination and Finding, Ms. Fowler discusses that, on
July 27, 2018, the Agency extend SRM Group’s performance for a fourth time. The July
27, 2018 Justification and Approval “extend[ed]” SRM Group’s performance until August
32
31, 2018 on the basis of other than full and open competition because of unusual and
compelling circumstances under FAR § 6.302-2. In the July 27, 2018 Justification and
Approval, the Agency again stated that a lapse in dormitory maintenance services would
pose an unacceptable risk to the Agency and would have a “major, negative impact on
the ability of the FLETC to provide critical training.” Ms. Fowler also notes that the Agency
“extend[ed]” SRM Group’s performance for a fifth time on August 29, 2018 when the
Agency had issued a fourth Justification and Approval pursuant to FAR § 6.302-2 on the
basis of unusual and compelling urgency. In the August 29, 2018 Justification and
Approval, the Agency, once again, stated that a potential lapse in dormitory maintenance
services posed an unacceptable risk to the Agency, and that a lapse in services would
negatively impact the Agency’s ability to train federal law enforcement officers. Thus, Ms.
Fowler notes that the Agency had extended the period of SRM Group’s performance of
dormitory maintenance services five times, once under FAR § 52.217-8 and four times
through Justifications and Approvals on the basis of other than full and open competition
because of unusual and compelling urgency under FAR § 6.302-2. In total, the Agency
utilized FAR § 52.217-8 and FAR § 6.302-2 to prolong SRM Group’s performance from
June 30, 2017 to September 30, 2018.
Regarding SRM Group’s performance under the four Justifications and Approvals,
in the October 2, 2018 Determination and Findings, Ms. Fowler states that:
In August, 2018, I learned from counsel, that the interested party’s attorneys
had objected to and expressed concern that the bridge contracts that
FLETC executed to obtain services during the protest, were obtained from
a contractor who was not in the 8A program and the acquisition was in the
8A program. Although, a standard practice at FLETC during protests was
awarding bridge contracts to the incumbent, I realized that this was not a
good practice in this case, and was contrary to my obligation to comply with
and fully support the Small Business Administration’s 8A program. This lead
to my decision to not award a new bridge contract to any contractor outside
the 8A program. It takes a total of five days to complete the congressional
notification process required for new awards in excess of one million dollars.
Thus, it was impossible to prepare and award a bridge contract to the
awardee for just the 120-day period required to complete the GAO protest
process in time to avoid doing without these services and jeopardizing
training. Therefore, I had no choice but to override the Stay to ensure
continued performance.
The Agency’s Urgent and Compelling Circumstances Justification
In a subsection of the October 2, 2018 Determination and Findings with a label
indicating that “Urgent and Compelling circumstances that significantly affect the
interests of the United States that will not permit waiting for the GAO decision on
the merits of the protest,” the October 2, 2018 Determination and Findings states:
The current contract has been extended several times beyond what is
33
normally allowed by the Extension of Services clause FAR 52.212-8 [sic].
Each extension has been a separate contract action supported by a
Justification and Approval (J&A) authorizing the continuation of services
under the status quo requirements. However, the incumbent contractor,
SRM Group, Inc., is no longer an 8(a) contractor, having graduated
approximately two years ago. Therefore, it is no longer feasible or proper to
continue services under the current contract to a contractor who is not even
an 8A contractor, and the only other option vice an override is to forego
these vital services throughout the GAO protest period. The impacts, as
described in the affidavit of Thomas J. Walters, Director of FLETC, would
be as follows:
1) Adversely impact FLETC training operations and could potentially
lead to classes being cancelled due to lodging disruption;
2) Could cause training to be unaffordable for our Partner Organizations
as we would attempt to use off-center lodging and it would be much
more expensive, and in some cases the Director believes they would
pull students from training as it would be unaffordable;
3) Due to upcoming CBP and ICE surge any disruption to lodging at a
time when we are looking for greater lodging capacity by double bunking
and more aggressive commercial lodging could jeopardize ability to
meet the requirements of the surge;
4) FLETC has limited staff and equipment resources and it is not clear
we could adequately clean common areas, issue keys, and maintain the
buildings adequate to meet health and safety needs which may well
result in the loss of the use of these dormitories even if we required
students to clean their own linens and rooms. Taking these steps would
negatively impact training as our training program is demanding, and
does not have student time included in the training schedule for room
and linen cleaning.
(emphasis in original). According to Ms. Fowler, “FLETC’s Chief Financial Officer
informed me [Ms. Fowler] the impact of replacing on-center lodging with off-center
lodging, assuming adequate off-center lodging was even available, would be
approximately $20 million over the course of a 120-day extension.”
In the October 1, 2018 affidavit signed by Thomas J. Walters,14 which is cited as
support in the October 2, 2018 Determination and Findings, Mr. Walters, the Director of
FLETC, states:
14 Safeguard’s October 4, 2018 second motion for a temporary restraining order and a
preliminary injunction and defendant’s and defendant-intervenor’s October 15, 2018
responses were filed before defendant filed the administrative record in the above-
captioned bid protest on October 16, 2018. Defendant included in the administrative
record the October 1, 2018 affidavit signed by Thomas J. Walters, as well as the October
12, 2018 supplemental affidavit signed by Thomas J. Walters. Safeguard has not objected
to the inclusion of the affidavits signed by Thomas J. Walters in the administrative record.
34
In Fiscal Year 2017, FLETC provided at its Glynco site basic qualification
training to over 16,000 Federal law enforcement officer and agent trainees,
and advanced training to almost 15,000 students. Additionally, FLETC has
begun planning efforts to meet the anticipated surge in training that CBP
and ICE will require to meet the hiring goals associated with Executive
Order 13767, Border Security and Immigration Enforcement Improvements,
and Executive Order 13768, Enhancing Public Safety in the Interior of the
United States. To meet the intents of these Executive Orders, CBP will hire
5,000 Border Patrol Agents and ICE will hire 10,000 Immigration Officers;
FLETC will be responsible for training almost all of them.
These extremely high training levels significantly exceed our on-Center
lodging capacity of just over 2,000 dormitory rooms/bed spaces. We are
attempting to increase our capacity by double-bunking many dormitory
rooms.
* * *
It would be impossible to make up for the loss of these dormitories through
hotels or other commercial lodging. FLETC has completely exhausted local
lodging options at our current level of training with all dormitories
operational. The budgetary constraints associated with attempting to house
additional students in commercial lodging would likely compel some of our
Federal partners to cancel training due to the increased costs associated
with off-Center lodging and transportation. Furthermore, utilizing lodging in
excess of 70 miles from FLETC would cause some of our Federal partners
to cancel training. Because FLETC is at full capacity for the entire training
year - and, in fact, has already informed some Federal partner agencies that
we could not support the entirety of their training requests - any training
cancelled could not be rescheduled for at least a year.
In the October 12, 2018 supplemental declaration signed by Thomas J. Walters,15
Mr. Walters states:
15 In the October 12, 2018 supplemental affidavit signed by Thomas J. Walters, Mr.
Walters states that “[t]his affidavit is not intended to contradict or in any way diminish my
previous affidavit. I prepared this supplemental affidavit to specifically clarify the
catastrophic harm that would result to the United States if the Court enjoins performance
of the FLETC’s Housing Maintenance contract.” In the October 12, 2018 supplemental
affidavit signed by Mr. Walters, Mr. Walters restates many of the conclusions Mr. Walters
reached in his October 1, 2018 affidavit, but further discusses the actions that the Agency
would take if the court were to issue an injunction in the above-captioned bid protest, as
well as the anticipated demands of the Agency’s federal agency partners in Fiscal Year
2019.
35
FLETC’s federal partners come from all 15 Cabinet-level departments, as
well as legislative branch and judicial branch organizations, independent
agencies, government corporations, and commissions. When they send
personnel for basic training at FLETC, they expect fully trained law
enforcement officers and agents to be ready for operations on their planned
graduation dates. Delays in training these personnel thus create personnel
deficits with the potential to impact the broad spectrum of federal law
enforcement activities in the United States. This would include, but is not
limited to, border security, apprehending violent fugitives, protecting our
Nation’s leaders and diplomats, aviation security, securing the U.S. Capitol
and numerous other federal buildings, investigating drug crimes, patrolling
our national parks, and other law enforcement operations that are critical to
public safety and security.
* * *
Any reduction in FLETC’s training capacity and output of fully trained and·
qualified officers and agents translates directly into federal law enforcement
agencies not having fully trained personnel to conduct law enforcement
functions critical to the safety and security of our nation’s communities and
people. Failure to replace the retiring officers would severely limit the ability
of Federal law enforcement agencies to safeguard Federal property and
personnel and to enforce the law in the National Parks. Agencies such as
the Capital Police, Federal Protective Service, the Secret Service agents
and uniformed officers, and United States Marshals, along with numerous
other agencies, all train at FLETC. Any reduction in the output of the FLETC
training pipeline of trained law enforcement officers to replace the officers
leaving these agencies would jeopardize health and safety by resulting in
less officers. This could affect the security of Federal buildings, courthouses
and the National Parks. This does not even address the draconian
consequences along the United States border that could result as FLETC
would not be able to respond to the anticipated surge directed by the
Executive Orders, as discussed in my previous affidavit.
As in the October 1, 2018 affidavit, Mr. Walters again states in the October 12, 2018
supplemental affidavit that, even if students were required to perform some dormitory
maintenance services, the Federal Law Enforcement Training Center in Glynco, Georgia,
still would not have adequate staff to complete all of the necessary dormitory maintenance
services. According to the October 12, 2018 supplemental affidavit, the Federal Law
Enforcement Training Center’s Mission Readiness and Support Directorate “is not staffed
for this additional work and is fully engaged with the duties for which they were hired.”
The October 2, 2018 Determination and Findings and the affidavits signed by
Thomas J. Walters indicate that, if the Agency does not have a contractor providing
dormitory maintenance services while Safeguard’s second post-award bid protest is
pending at the GAO, which may be pending until January 3, 2019, the Agency will be
36
unable to continue training a sufficient number federal law enforcement officers and will
not be able to house all of its students on site in Glynco, Georgia. By not operating at its
full capacity, the Federal Law Enforcement Training Center in Glynco, Georgia, will have
to cancel training sessions for federal law enforcement officers. According to the October
1, 2018 affidavit signed by Thomas J. Walters, “FLETC is at full capacity for the entire
training year,” and “any training cancelled could not be rescheduled for at least a year.”
Any cancellation of training for federal law enforcement students, therefore, would result
in federal agencies being unable to meet their demands for qualified, trained federal law
enforcement officers, which would undermine the ability of federal agencies to field the
necessary number of federal officers.
The Agency indicates that, without a contractor providing dormitory maintenance
services, the Agency would have to outsource some of its lodging requirements to
commercial providers, which would increase the costs of training federal law enforcement
officers. The October 2, 2018 Determination and Findings indicates that the cost of
outsourcing lodging to commercial providers would be “approximately $20 million over
the course of a 120-day extension.” The increased costs of training would be passed onto
federal agency partners, and, because outsourcing lodging requirements to commercial
providers increases the cost of training, federal agencies will be unable to afford to train
a sufficient number of new officers. The October 1, 2018 affidavit signed by Thomas J.
Walters indicates that, by training fewer federal law enforcement officers, there will not be
enough trained federal officers to meet the demands of federal agencies, “thereby
effecting the national security of the Nation.” Moreover, the October 2, 2018
Determination and Findings and the October 1, 2018 affidavit signed by Thomas J.
Walters indicate that the demands of federal agencies have increased in connection with
the issuance of several Executive Orders. According to the October 12, 2018 affidavit
signed by Mr. Walters, the Agency trained more than 20,000 recruits in Fiscal Year 2018,
and, “[f]or FY [fiscal year] 2019, FLETC expects this demand to exceed its capacity in
terms of facilities and instructor resources.”
If the Agency was not able to acquire dormitory maintenance services covering the
duration of Safeguard’s second post-award bid protest at the GAO after SRM Group’s
performance was complete on September 30, 2018, the Agency’s ability to produce
qualified, trained federal law enforcement officers would have been greatly diminished.
Without a contractor providing dormitory maintenance services, the Agency would have
been unable to meet its current training schedule as previously established with federal
agencies, and federal agencies would have received less trained federal law enforcement
officers than anticipated. As indicated in the October 12, 2018 supplemental affidavit
signed by Thomas J. Walters, the inability of the Agency to meet the demands of federal
agency partners limits “the ability of Federal law enforcement agencies to safeguard
Federal property and personnel and to enforce the law in the National Parks.” The
consequences of forgoing dormitory maintenance services while Safeguard’s second
post-award bid protest is resolved at the GAO until January 3, 2019 would be significant
and adverse and would negatively impact the pool of trained federal law enforcement
officers available for use by federal agencies. According to the October 12, 2018
supplemental affidavit signed by Thomas J. Walters, in Fiscal Year 2018, the Agency’s
37
contractor, in addition to providing dormitory maintenance services, was responsible for
“in-processing on average 375 arriving students in a given week,” and requiring “the
students to clean their own rooms, clean the dormitory common areas, wash their own
linen, and assist in controlling key distribution” would “result in a longer training day and
would necessarily force the pace of training to slow down.” The Agency also has
insufficient staff to provide the required dormitory maintenance services itself, for which
the Agency currently appears to be paying approximately $900,000.00 per month to B&O.
Indeed, the Agency had previously recognized the importance of dormitory
maintenance services when the Agency issued four Justifications and Approvals to SRM
Group, which authorized the continuation of dormitory maintenance services beyond the
expiration of the final option period of performance in the SRM Group Contract, as
awarded on June 28, 2012. Each of the four Justifications and Approvals asserted that
the need for continued dormitory maintenance services was an unusual and compelling
need and utilized other than full and open competition procedures under FAR § 6.302-2.
The four Justifications and Approvals identified dormitory maintenance services as being
critical to the Agency’s mission and indicated, “[s]hould these critical services become
unavailable, it would have a major, negative impact on the ability of the FLETC to provide
critical training to approximately 95 federal agencies partnered with FLETC.” The four
Justifications and Approvals issued to continue SRM Group’s provision of dormitory
maintenance services are consistent with the court’s conclusion that the Agency would
suffer significant adverse consequences if the Agency did not obtain dormitory
maintenance services during the balance of Safeguard’s second post-award bid protest
at the GAO.
As to whether there were reasonable alternatives to overriding the CICA stay, the
Agency first received notice of Safeguard’s second post-award bid protest on Tuesday,
September 25, 2018, when Safeguard filed its second post-award bid protest at the GAO.
As of September 25, 2018, the Agency had approximately five days to determine how to
proceed, before SRM Group’s performance under the fourth Justification and Approval
pursuant to FAR § 6.302-2 on the basis of unusual and compelling urgency was
scheduled to end on Sunday, September 30, 2018 and dormitory maintenance services
performance would come to an end.
The last option period of performance in SRM Group’s contract with the Agency,
as awarded on June 28, 2012, had been set to expire on June 30, 2017, but the Agency,
prior to the end of the SRM Group Contract, issued two three-month extensions of SRM
Group’s contract under FAR § 52.217-8. Thereafter, the Agency could not further extend
SRM Group’s performance under FAR § 52.217-8 because “the total extension of
performance” under FAR § 52.217-8 cannot exceed six months. See FAR § 52.217-8.
The Agency, however, had issued four Justifications and Approvals pursuant to FAR
§ 6.302-2 that, collectively, continued SRM Group’s performance from December 31,
2017 to September 30, 2018.16
16 According to defendant, the Agency’s Justifications and Approvals under FAR § 6.302-
2 were “sole-source contract actions” that “were justified by urgent and compelling
circumstances.” Defendant-intervenor argues that the Agency’s Justifications and
38
At the October 17, 2018 oral argument, counsel of record for Safeguard asserted
that, as an alternative to overriding the CICA stay, the Agency could have awarded a
sole-source bridge contract to SRM Group. The October 2, 2018 Determination and
Findings indicates that Ms. Fowler did consider awarding a bridge contract to SRM Group
for dormitory maintenance services, which, presumably, would have been issued
pursuant to FAR § 6.302-2 on the basis of unusual and compelling urgency, under which
the previous four Justifications and Approvals had been issued. Ms. Fowler, however,
stated that:
It takes a total of five days to complete the congressional notification
process required for new awards in excess of one million dollars. Thus, it
was impossible to prepare and award a bridge contract to the awardee for
just the 120-day period required to complete the GAO protest process in
time to avoid doing without these services and jeopardizing training.
Ms. Fowler’s statement in the October 2, 2018 Determination and Findings appears to be
referencing a requirement in the DHS Acquisition Manual (HSAM) (2018)17 at Section
3005.303-70, which is titled “Congressional notification of contract actions.” HSAM
§ 3005.303-70 states that the “Congressional notification requirements are required by
the Consolidated Appropriations Act, which is appropriations law.” See HSAM
§ 3005.303-70(a). DHS contracting officers are required to “prepare and electronically
submit the Congressional notification” to the DHS Office of Legislative Affairs at “least five
(5) full business days prior to the anticipated award or notice of award per Appendix D.
(i) The business day begins at 9:00 a.m. Eastern Time (ET). For notifications received
after 9:00 a.m. ET, the first full business day will be the day following receipt.” See HSAM
§ 3005.303-70(d). Appendix D of the HSAM states that Congressional notification is
required for “a new contract award with a total contract value (i.e. base and all option
quantities or periods) exceeding $1M,” as well as “a modification exceeding $1M
(excluding option exercises).” “[C]ontract actions” identified in Appendix D, which include
both new awards and modifications exceeding $1,000,000.00, “shall not be awarded,
issued or distributed, nor information released to sources outside of DHS (except as
described in FAR 15.503(a)(1)), until the requirements of Appendix D and this subsection
have been satisfied.” See HSAM § 3005.303-70(b).
If the Agency had opted to award a sole-source bridge contract to SRM Group
covering the period of October 1, 2018 to January 3, 2019, the bridge contract is
described as being in excess of $1,000,000.00, as SRM Group’s most recent three one-
month periods of performance under FAR § 6.302-2 were awarded at a value of
Approvals under FAR § 6.302-2 were “authorized based on FLETC’s determination that
unusual and compelling urgency supported sole-source contract actions.”
17 The HSAM is updated multiple times per year. See HOMELAND SECURITY ACQUISITION
MANUAL, https://www.dhs.gov/publication/hsam (last visited Oct. 24, 2018). The version
of the HSAM that was in effect when the Agency issued its October 2, 2018 Determination
and Findings was issued on June 29, 2018. See id.
39
$778,975.33, $882,537.69, and $996,416.13, respectively. As such, the bridge contract
would have required Congressional notification, as well as internal pre-notification actions
within the Agency. Because Safeguard filed its second post-award bid protest at the GAO
on Tuesday, September 25, 2018, Ms. Fowler correctly noted that the Agency could not
have completed the five-day Congressional notice requirement prescribed in HSAM
§ 3005.303-70(d) and that a bridge contract could not have been awarded before SRM
Group’s performance ended on Sunday, September 30, 2018, even if the Agency filed
the Congressional notice before 9:00 a.m., EDT, on Wednesday, September 26, 2018.
As noted by defendant, the Agency, however, had already provided Congressional
notification of an award to B&O under the Solicitation in June 2018, when the Agency had
first selected B&O as the apparent awardee under the Solicitation, prior to the multiple
bid protests filed by Safeguard.
Moreover, at the October 17, 2018 oral argument, Agency personnel indicated that
the five-day Congressional notice period is not the only step the Agency needs to take
when awarding a bridge contract. The Agency needs to negotiate pricing and other terms
with a potential bridge contract awardee and needs to prepare and execute
documentation justifying the award of a bridge contract. According to Agency personnel,
awarding a sole-source bridge contract can take one week to thirty days.18 The Agency,
therefore, would have been without dormitory maintenance services for a period of time
if the Agency had awarded a sole-source bridge contract to SRM Group, as counsel of
record for Safeguard suggested.19 The break in dormitory maintenance services, as
discussed above, would have adversely impacted the Agency’s ability to train federal law
enforcement officers, and the Agency would have had to reschedule any canceled
classes for more than a year later. Ms. Fowler recognized that it would not be possible to
award another sole-source bridge contract to any entity without experiencing a break in
dormitory maintenance services and rationally determined that a bridge contract was
unworkable under the circumstances. The Agency also was not required to award a sole-
18On September 27, 2018, Suresh S. Prabhu, the President of SRM Group, sent an email
message to Sheryle Wood, a contracting officer with the DHS, containing SRM Group’s
“Unsolicited Offer to Extend Services on the Housing Project at the current rates for 1 or
3 months.” (capitalization in original). Even if the Agency had quickly determined that
SRM Group’s “unsolicited offer” was in the interest of the Agency and executed another
sole-source bridge contract to SRM Group shortly thereafter, the Agency still would have
experienced a break in services of dormitory maintenance services, which would have
adversely impacted the Agency’s ability to train federal law enforcement officers, as
discussed above.
19 At the October 17, 2018 oral argument, counsel of record for B&O indicated that the
Agency could have awarded B&O a bridge contract, rather than overriding the CICA stay.
As the court’s analysis above demonstrates, however, the Agency could not have
awarded a bridge contract to Safeguard, B&O, or a different contractor without
experiencing a break in dormitory maintenance services, which would have negatively
impacted the Agency’s ability to train federal law enforcement officers, because of the
time required to negotiate a potential bridge contract and the five-day Congressional
notification requirement at HSAM § 3005.303-70.
40
source bridge contract to SRM Group, but was required to consider its alternatives to
overriding the CICA stay, which, based on Ms. Fowler’s statements in the October 2, 2018
Determination and Findings, the Agency did prior to deciding to override the CICA stay.
Other than awarding a sole-source bridge contract or having the Agency internally
provide the dormitory maintenance services, the parties and the Agency have not
identified possible alternatives to overriding the CICA stay which would keep dormitory
maintenance services in place. Because the Agency could not award a sole-source bridge
contract without experiencing a gap in dormitory maintenance services and does not have
sufficient staff to provide dormitory maintenance services itself, the Agency was faced
with either not having a contractor provide dormitory maintenance services to the Agency,
which would have significantly and adversely impacted the Agency’s training of federal
law enforcement officers, or overriding the CICA stay. The Agency rationally determined
that there were no reasonable alternative to overriding the CICA stay.
Regarding the third factor in Reilly’s Wholesale, “how the potential cost of
proceeding with the override, including the costs associated with the potential that the
GAO might sustain the protest, compare to the benefits associated with the approach
being considered for addressing the agency’s needs,” the October 2, 2018 Determination
and Findings states that:
Protest Issues/Analysis: The protest [at the GAO] rests on two
allegations:
a. Allegation 1: DHS Conducted an Unreasonable and Disparate
Pricing Evaluation. FLETC believes its pricing evaluation was accurate.
SBO failed to price a series of CLINs in the amount of $6.1M as specifically
directed by the solicitation, as amended. This mistake rendered their price
proposal non-compliant as offerors were warned could happen. Also,
because the FAR prohibits changing an offerors price as a result of a price
realism analysis, it was not possible to compare their price to other
compliant priced proposals in the trade-off analysis. Therefore, FLETC
expects GAO to rule in its favor.
b. Allegation 2: DHS Conducted a Flawed Best Value Trade-Off. The
source selection utilized a full trade-off process in accordance with FAR Part
15 in which all non-price factors when added together were approximately
equal to price. As stated above, SBO’s price proposal was non-compliant
and could not be compared to other prices in a trade-off analysis. However,
they were also not the highest technically evaluated offeror and the SSA
determined the premium price that would be paid to the highest rated offeror
was the best value to the Government. Therefore, FLETC expects GAO to
rule in its favor.
Legal Coordination: In making my determination, I [Robin Fowler] have
considered the advice of FLETC’s procurement attorney, Mr. James C.
41
Caine, regarding the merits of the protest that triggered the CICA Stay. In
his opinion, based upon his review of the protest, FLETC’s position appears
to be defensible and well supported by law and fact. Even if GAO were to
sustain the protest, however, the interests at risk from delay are so great
that they overcome the risks to the Agency of an adverse ruling by the GAO.
(emphasis in original). The October 2, 2018 Determination and Findings also states:
As one of the concerns of override is that the agency would be less likely to
comply with GAO’s ultimate ruling, it is noted that the Federal Law
Enforcement Training Centers was created in 1975, and through its entire
history, has never failed to comply with a recommendation of the
Government Accountability Office.[20]
The October 2, 2018 Determination and Findings indicates that the Agency, when
considering that the GAO might sustain Safeguard’s second post-award bid protest,
concluded that the Agency believed its position at the GAO to be “defensible” and “well
supported by law and fact.” The Agency found that the potential consequences that the
Agency would endure absent a contractor providing dormitory maintenance services to
be “so great that they overcome the risks to the Agency of an adverse ruling by the GAO.”
After consideration, the Agency has given no indication that it would not comply with
GAO’s ultimate ruling, and stated that the Federal Law Enforcement Training Center,
since its inception in 1975, has never failed to comply with a recommendation of the GAO.
Although protestor argues that the “D&F [Determination and Findings] does not even
attempt to quantify the economic harm to DHS if Safeguard’s GAO protest is sustained,”
the October 2, 2018 Determination and Findings indicates that the Agency considered
the possibility of the GAO sustaining Safeguard’s second post-award bid protest and
indicates that the Agency was aware that it would incur any costs associated if such a
result at the GAO should occur, but concluded the total risks to the Agency were worth
overriding the stay. See Superior Helicopter LLC v. United States, 78 Fed. Cl. at 193
(determining that an agency adequately considered the costs of an adverse GAO decision
notwithstanding that the agency “did not engage in a quantitative analysis of costs and
benefits”).
Moreover, in the October 2, 2018 Determination and Findings, the Agency
recognized a multitude of benefits to the law enforcement community at large associated
with overriding the CICA stay. The October 2, 2018 Determination and Findings indicates
that overriding the CICA stay would permit the Agency to continue training federal law
enforcement officers at the Agency’s current levels while Safeguard’s second post-award
bid protest is pending at the GAO. The October 2, 2018 Determination and Findings
recognizes that overriding the CICA stay allows the Agency to avoid the consequences
described in the October 2, 2018 Determination and Finding as being “catastrophic.” The
20“GAO decisions are only recommendations and not binding on the agency.” Jacobs
Tech. Inc. v. United States, 100 Fed. Cl. 186, 197 (2011) (citing 31 U.S.C. § 3554(b), (e);
and Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989)).
42
Agency also noted that, “by overriding the stay of performance, the period of performance
is now long enough for the contractor to begin to implement double-bunking in two
dormitories, which is critical to resolving the shortage of on-center lodging.” The Agency
appears to have considered that the GAO may sustain Safeguard’s second post-award
bid protest, which the Agency regarded as unlikely, and determined that performance now
by B&O, the awardee under the Solicitation, outweighed the costs of transitioning to a
different contractor should the GAO sustain Safeguard’s second post-award bid protest.
As to the fourth factor identified by the United States Court of Federal Claims in
Reilly’s Wholesale, “the impact of the override on competition and integrity of the
procurement system,” the protestor correctly notes that the October 2, 2018
Determination and Findings did not explicitly address the impact overriding the CICA stay
would have on the procurement system. In the October 2, 2018 Determination and
Findings, however, the Agency did note that a potential concern of impacted parties may
be “that the agency would be less likely to comply with GAO’s ultimate ruling,” but noted
that the Agency has never failed to comply with a recommendation of the GAO. The
Agency determined that it could not award another bridge contract to SRM Group and
also discussed the impact of its previous extensions of SRM Group’s performance.
Although the words of the Determination and Findings that “it is no longer feasible or
proper to continue services under the current contract to a contractor [SRM Group] who
is not even an 8A contractor, and the only other option vice an override is to forego these
vital services throughout the GAO protest period” is not carefully crafted, it was not
necessarily the absence of SRM Group’s current 8(a) status that precluded award of a
bridge contract to SRM Group. Rather, a variety of issues led to the Agency’s decision,
including the overall procurement policy consideration of awarding the next contract
action to an 8(a) contractor, given that SRM Group had graduated from the 8(a) program
years ago. In the October 2, 2018 Determination and Findings, Ms. Fowler states that:
This lead to my decision to not award a new bridge contract to any
contractor outside the 8A program. It takes a total of five days to complete
the congressional notification process required for new awards in excess of
one million dollars. Thus, it was impossible to prepare and award a bridge
contract to the awardee for just the 120-day period required to complete the
GAO protest process in time to avoid doing without these services and
jeopardizing training.
The October 2, 2018 Determination and Findings, therefore, indicates that the Agency
considered the impact that overriding the CICA stay would have on the integrity of the
procurement system in light of the impact other potential, albeit unworkable under the
circumstances, alternatives would have on the procurement system, such as awarding a
bridge contract to a non-8(a) contractor for work that has previously been set-aside for
8(a) contractors and is currently set-aside for 8(a) contractors under the Solicitation.
Based on the record currently before the court, the Agency identified significant
adverse consequences that would occur if the Agency did not have a contractor providing
dormitory maintenance services, rationally determined that there were no reasonable
43
alternatives to overriding the CICA stay, considered the costs and benefits associated
with overriding the CICA stay, and considered the effects of the Agency’s actions on the
integrity of the procurement system. The Agency’s decision to override the CICA stay
based on “urgent and compelling circumstances that significantly affect interests of the
United States” and “will not permit waiting for the decision of the Comptroller General
concerning the protest,” therefore, was not arbitrary and capricious. See 31 U.S.C. §
3553(d)(3)(C).
The Agency’s Best Interests of United States Justification
In the October 2, 2018 Determination and Findings, Ms. Fowler indicates that
overriding the CICA stay “is also in the best interests of the United States.” “In order for a
stay override to be proper under a best interests justification, ‘[t]here must be some
rationale—above and beyond the principle aim originally sought when [the agency]
decided to engage bidders in the competitive procurement—that absolves the agency of
its obligation to await the GAO’s recommendation.’” Nortel Gov’t Sols., Inc. v. United
States, 84 Fed. Cl. at 251-52 (alterations in original) (quoting Advanced Sys. Dev., Inc. v.
United States, 72 Fed. Cl. at 31). An allegation that “the new contract is better than the
old one in terms of cost or performance is not enough to justify a best interests
determination.” See Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. at 31; see
also Intelligent Waves, LLC v. United States, 137 Fed. Cl. at 626 (“An assertion that a
new contract is in essence better than a current one is not sufficient to show ‘best
interests.’” (quoting Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. at 31)). “The
payment of significantly higher costs under an incumbent or bridge contract,” however,
may be “the sort of significant adverse consequence to justify an override when these are
shown to be prohibitive.” See Supreme Foodservice GmbH v. United States, 109 Fed. Cl.
at 393.
In the October 2, 2018 Determination and Findings, under a subheading stating
that “[c]ontinued performance is in the Best Interests of the United States,” Ms.
Fowler stated, in full, that:
The corrective actions over the past 3 months have resulted in a monthly
contract extension to the incumbent contractor. The first extension resulted
in an 11% increase over previous prices, which equals to $104,494.15. The
second extension resulted in an additional 7.5% increase, which equals
$20,125.99. Then finally, the third extension resulted in an additional 6%
increase, which equals $30,682.44. In total, FLETC is now paying in excess
of 26% over the original negotiated cost of these services, or $155,372.58
per month. The incumbent, SRM’s current monthly price is $325,979.12
over what we would be paying the awardee if the award were not
suspended as a result of the first protest, and would cause us to expend
close to $1.3 million for the period of the protest more than necessary, had
we continued performance with the incumbent. Thus it would fiscally
irresponsible to continue down this path, rather than continue services
44
under the newly awarded contract that was determined to offer the best
value to the government and not in the best interests of the Government.
Additionally, by overriding the stay of performance, the period of
performance is now long enough for the contractor to begin to implement
double-bunking in two dormitories, which is critical to resolving the shortage
of on-center lodging.
Finally, and most importantly, as stated previously, this is an 8(a)
designated service and the incumbent continuing to perform the work via a
bridge contract (extension) would go against the rules of the 8(a) program.
The awardee had demonstrated they are the most qualified 8A to perform
this work.
(emphasis and capitalization in original).
In the October 2, 2018 declaration signed by Suresh S. Prabhu, who states that
he is the President of SRM Group, Mr. Prabhu alleges that:
For the month of September 2018, SRM billed FLETC the following
amounts for housing services performed pursuant to the Contract: 1)
$[redacted] for the fixed fee items under the Contract; and 2) $[redacted]
for the variable items under the Contract (because the number of rooms
cleaned each month changes), for a total billing of $891,565.52. At this rate,
SRM’s annual billing under the Contract would be $10,698,786.24.
The Award made to B&O per the FBO is for $77,734,857.02 for a period of
7 years and 3 months (7.25 years), therefore the average rate that B&O
would be billing FLETC for the same services is $10,722,049.24 annually,
or $893,504.10 monthly, which is higher than what SRM has been charging
under its recent extension contracts and would be charging had DHS issued
a further bridge contract.
(emphasis in original). Based on the limited and conflicting evidence currently before the
court at this stage of the proceeding, however, it is unclear what the economic impact of
overriding the CICA stay would be on the Agency’s budget.
Protestor’s argument as to the Agency’s use of the best interests justification,
however, overlooks the lack of reasonable alternatives available to the Agency and the
significant adverse consequences the Agency would have encountered had the Agency
declined to override the CICA stay, as discussed above by the court. Although not
specifically restated under the subsection in the October 2, 2018 Determination and
Findings addressing the best interests of the United States, the Agency’s reasoning for
overriding the CICA stay, as expressed throughout the October 2, 2018 Determination
and Findings, indicates that overriding the CICA stay was in the best interests of the
United States. By overriding the CICA stay, the Agency will be able to continue training
45
federal law enforcement officers and will be able to continue to attempt to satisfy federal
agencies’ demands for qualified, trained federal law enforcement officers. As explained
in the October 1, 2018 affidavit signed by Thomas J. Walters, if the Federal Law
Enforcement Agency did not have a contractor providing dormitory maintenance services,
the impact on the FLETC’s ability to train Federal law enforcement officers
and airport screeners would be disastrous. Given the potential
consequences of the cancellation of training critical to secure the Nation -
and particularly its airports and borders - FLETC would do everything
possible to maintain the training schedule. However, it is doubtful FLETC
would have the internal resources to operate all nine dormitories without
this contract. Consequently, any significant reduction in our lodging capacity
would inevitably result in the cancellation of training and concomitant delay
in our Federal partners being able to deploy trained law enforcement
officers into their operational mission environments.
The October 2, 2018 Determination and Findings also states that, “by overriding the stay
of performance, the period of performance is now long enough for the contractor to begin
to implement double-bunking in two dormitories, which is critical to resolving the shortage
of on-center lodging” and will permit the Agency to increase its capacity to train federal
law enforcement officers.
Moreover, by overriding the CICA stay and having B&O provide dormitory
maintenance services, the Agency aimed to avoid future disruptions of dormitory
maintenance services and transitions of contractors providing dormitory maintenance
services. As noted in the October 2, 2018 Determination and Findings, SRM Group has
graduated from the 8(a) program, and the resultant contract under the Solicitation, which
has been awarded to B&O, is set-aside for 8(a) contractors for which SRM Group is not
eligible. Regardless of whether Safeguard prevails on its second post-award bid protest
at the GAO, SRM Group cannot be the awardee under the Solicitation because SRM
Group is not eligible to receive an 8(a) set-aside contract. Inevitably, the Agency was
going to have to transition away from SRM Group, and the Agency’s decision, under the
circumstances described in the October 2, 2018 Determination and Findings, to transition
to the current awardee under the Solicitation, B&O, was a rational Agency decision.
Potentially limiting future disruption of federal law enforcement officer training was a
rational element of the Agency’s decision considered to be in the best interests of the
United States, even with the risk of an adverse GAO decision in January 2019. The
Agency, therefore, has articulated a rational basis for overriding the CICA stay because,
according to FLETC, “performance of the contract is in the best interests of the United
States.” See 31 U.S.C. § 3553(d)(3)(C).
Turning to the second factor for a temporary restraining order or preliminary
injunction, whether protestor will suffer irreparable harm, “[w]hen assessing irreparable
injury, ‘[t]he relevant inquiry in weighing this factor is whether plaintiff has an adequate
remedy in the absence of an injunction.’” Insight Sys. Corp. v. United States, 110 Fed. Cl.
564, 582 (2013) (quoting Magellan Corp. v. United States, 27 Fed. Cl. 446, 447 (1993));
46
see also Iron Bow Techs., LLC v. United States, 132 Fed. Cl. 346, 358 (2017) (citing
Heritage of Am., LLC v. United States, 77 Fed. Cl. 66, 78, recons. denied, 77 Fed. Cl. 81
(2007)); Rush Constr., Inc. v. United States, 117 Fed. Cl. 85, 101 (2014); CW Gov’t
Travel, Inc. v. United States, 110 Fed. Cl. 462, 494 (2013); Overstreet Elec. Co. v. United
States, 47 Fed. Cl. 728, 743 (2000). If the Agency is permitted to continue acquiring
services from B&O as a result of the Agency’s override of the CICA stay, Safeguard will
not be losing the ability to perform a contract or losing an opportunity to compete for a
contract. Safeguard is not the incumbent contractor, nor is Safeguard currently on site
and ready to provide dormitory maintenance services. Nor will Safeguard be irreparably
harmed “because Safeguard’s proposal has been wrongfully eliminated from
consideration for award and it has filed a timely challenge of DHS’ irrational evaluation
with the GAO,” as protestor contends. Safeguard’s remedy at the GAO will be preserved,
regardless of whether this court upholds the Agency’s decision to override the CICA stay,
as the GAO is currently due to issue a decision on Safeguard’s second post-award bid
protest at the GAO on or before January 3, 2019. If the GAO sustains Safeguard’s second
post-award bid protest at the GAO, Safeguard’s opportunity to compete for a contract or
a portion of a contract under the Solicitation will be maintained.
Additionally, SRM Group, a forty-nine percent owner of the Safeguard joint
venture, will not be irreparably harmed if this court finds that the Agency’s decision to
override the CICA was rational. The Agency’s extension of the SRM Group Contract
under FAR § 52.217-8 expired in December 2017, and SRM Group performed under sole-
source contract actions on the basis of unusual and compelling circumstances under FAR
§ 6.302-2 from January 1, 2018 to September 30, 2018. SRM Group did not have a right
to receive additional sole-source bridge contracts under FAR § 6.302-2 from the Agency
after SRM Group’s performance ended on September 30, 2018.
Regarding the third factor for injunctive relief, the balance of the hardships, if the
court issues a temporary restraining order or preliminary injunction, the Agency will no
longer be able to acquire dormitory maintenance services from B&O in the manner in
which the Agency is currently receiving B&O’s services. The Agency will either have to
forgo dormitory maintenance services for an extended period of time and suffer the
significant adverse consequences discussed above or award a new bridge contract for
dormitory maintenance services, which also will result in the Agency being without
dormitory maintenance services for a period of time. The disruption of dormitory
maintenance services to the Agency and the costs of transitioning away from B&O and
possibly to another new contractor would impose financial hardships on the Agency and
would negatively impact the quality of the training provided to federal law enforcement
officers. The hardship injunctive relief imposes on the United States would outweigh the
harm to Safeguard because a remedy for Safeguard to challenge any alleged improper
evaluation by the Agency is preserved at the GAO. See Idea Int’l, Inc. v. United States,
74 Fed. Cl. 129, 142 (2006) (“Constant changing of teachers, regardless of their abilities,
would interrupt the quality of education provided. Inevitably, there would be delay in any
transition, and a corresponding delay in the expected educational progress of the
children. In balancing the harms, the Court’s deference to time-sensitive circumstances
is well established.” (citations omitted)).
47
Regarding the public interest factor, “‘[t]he public interest in honest, open, and fair
competition in the procurement process is compromised whenever an agency abuses its
discretion.’” CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. at 495 (quoting PGBA,
LLC v. United States, 57 Fed. Cl. 655, 663 (2003)); see also Torres Advanced Enter.
Sols., LLC v. United States, 133 Fed. Cl. 496, 534 (2017); Cohen Fin. Servs., Inc. v.
United States, 110 Fed. Cl. 267, 289 (2013); Am. Safety Council, Inc. v. United States,
122 Fed. Cl. 426, 444 (2015) (holding that “the public interest will be served by an
injunction by preserving the integrity of the procurement process”); Applied Bus. Mgmt.
Sol., Inc., LLC v. United States, 117 Fed. Cl. 589, 608 (2014); BINL, Inc. v. United States,
106 Fed. Cl. 26, 49 (2012) (“With regard to the public interest, it is well-settled that there
is a public interest in remedying violations of law.”); United Int’l Investigative Servs., Inc.
v. United States, 41 Fed. Cl. 312, 323 (1998) (“[T]he public has a strong interest in
preserving the integrity of the procurement process.” (citing Parcel 49C Ltd. P’ship v.
United States, 31 F.3d 1147, 1153 (Fed. Cir. 1994))); An important public interest is
served through conducting “honest, open, and fair competition” under the FAR, because
such competition improves the overall value delivered to the government in the long term.
See CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. at 495. In the above-captioned
bid protest, the Agency rationally determined to override the CICA stay because of urgent
and compelling circumstances and because overriding the CICA stay was in the best
interests of the United States, both of which were sufficiently considered before the
Agency arrived at its override decision. See 31 U.S.C. § 3553(d)(3)(C). By overriding the
CICA stay, the Agency will be able to continue to obtain and improve dormitory
maintenance services, services which are critical to the Agency’s ability to train federal
law enforcement officers for the Agency’s ninety-five federal agency partners who rely on
FLETC. The Agency also will further maintain the integrity of the 8(a) program by having
an 8(a) contractor, B&O, provide services that have been set-aside for 8(a) eligible
contractors. Although the automatic stay is no longer in place, the GAO process to review
the Agency’s procurement process remains active and in place.
CONCLUSION
Protestor has not demonstrated that the Agency’s decision to override the CICA
automatic stay was arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law. Protestor’s second motion for a temporary restraining order and
preliminary injunction, therefore, is DENIED. The Clerk of the Court shall enter
JUDGMENT consistent with this Opinion.
IT IS SO ORDERED.
s/Marian Blank Horn
MARIAN BLANK HORN
Judge
48