Sonoran Technology and Professional Services, LLC v. United States

In the United States Court of Federal Claims
No. 17-711C
(Filed Under Seal: July 7, 2017)
(Reissued for Publication: July 17, 2017)1
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SONORAN TECHNOLOGY AND *
PROFESSIONAL SERVICES, LLC, *
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Plaintiff, *
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v. *
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THE UNITED STATES, * Bid Protest; Supplementing the
* Administrative Record; Small
Defendant, * Business Administration.
*
and *
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SPECTRE PURSUIT GROUP, LLC, *
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Defendant-Intervenor. *
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Brett W. Johnson, with whom was Andrew Sniegowski, Snell & Wilmer, LLP, Phoenix,
Arizona, for Plaintiff.
Jessica L. Cole, with whom were Chad A. Readler, Acting Assistant Attorney General,
Robert E. Kirschman, Jr., Director, Claudia Burke, Assistant Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., and
Captain Ryan Payne, Of Counsel, Commercial Litigation Field Support, U.S. Air Force,
for Defendant.
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The Court issued this decision under seal on July 7, 2017 and invited the parties to submit proposed
redactions of any competitive-sensitive, proprietary, confidential, or other protected information on or
before July 14, 2017. By that date, none of the parties proposed redactions. Thus, the Court reissues the
opinion in its entirety for publication.
J. Bradley Reaves, with whom was Beth V. McMahon, ReavesColey, PLLC, Chesapeake,
Virginia, for Defendant-Intervenor.
ORDER REGARDING SECOND MOTION TO SUPPLEMENT THE RECORD
WHEELER, Judge.
In this bid protest, Sonoran Technology and Professional Services, LLC
(“Sonoran”) challenges the United States Air Force’s decision to terminate its contract to
train aircrew to fly B-52 and B-51 aircrafts and award the same contract to Spectre Pursuit
Group, LLC (“SPG”) as a result of corrective action. Sonoran now seeks to supplement
the Administrative Record, for the second time, with all documents currently in the Air
Force’s possession related to the United States Small Business Administration’s (“SBA”)
decision to issued SPG a Certificate of Competency (“COC”). For the reasons described
below, Sonoran’s motion is GRANTED IN PART and DENIED IN PART.
Background
On February 29, 2016, the Air Force issued Request for Proposal FA6800-16-R-
0001 seeking a service-disabled veteran-owned small business for courseware
development and training for its aircrew flying B-52 and B-51 aircrafts. AR 489. The
awardee was required to have a facility security clearance (“FCL”) at the time of the award.
Id. at 558. Sonoran and SPG were two of nine offerors who submitted proposals. Id. at
2287-2944. At the time SPG submitted its proposal, it did not have the required FCL. Id.
at 9255, 2315. On July 22, 2016, the Contracting Officer, Captain John R. Sidor,
determined that SPG was unawardable because it had not received an FCL and promptly
awarded the contract to Sonoran. Id. at 6391, 6653.
After first filing before the Government Accountability Office (“GAO”), which
dismissed the protest, SPG filed a bid protest before this Court on November 28, 2016
challenging the Air Force’s decision not to refer SPG to the SBA for a responsibility
determination. Id. at 8728-85. Sonoran did not intervene in that protest. Id. On December
7, 2016, before any briefing was completed, Capt. Sidor took corrective action and referred
the matter of SPG’s responsibility to the SBA. Id. at 8762. Based on this corrective action,
this Court dismissed SPG’s protest on December 8, 2016. Id. at 8768.
On January 5, 2017, the SBA notified the Air Force and SPG that it could not make
a responsibility determination because the contract had already been awarded to Sonoran.
Id. at 8772. The next day, SPG filed a new bid protest before this Court challenging the
SBA’s failure to make a responsibility determination. Id. at 8773. On January 24, 2017,
after SPG had secured an FCL, the SBA determined that SPG was responsible and issued
a Certificate of Competency (“COC”) despite Sonoran’s contract still being in effect. Id.
at 8824. There is no explanation of the SBA’s decision to find SPG responsible. On
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February 2, 2017, Capt. Sidor terminated Sonoran’s contract and made an award to SPG.
Id. at 8827, 8829. Capt. Sidor explained to Sonoran that it was terminating the contract
“[a]s a result of corrective action . . . in response to a protest filed by [SPG].” Id. at 8829.
This Court dismissed SPG’s second protest as moot the following day. Spectre Pursuit
Group, LLC v. United States, No. 17-26C (Fed. Cl., Feb. 3, 2017) (Dkt. No. 18).
Sonoran filed this protest on May 30, 2017 and SPG intervened on May 31, 2017.
Dkt. Nos. 1, 9. The Government filed the Administrative Record on June 9, 2017. Dkt.
No. 13. On June 15, 2017, Sonoran filed a motion to supplement the Administrative
Record with depositions from Capt. Sidor and a representative from the SBA. Dkt. No.
14. On June 27, 2017, the Court granted the motion in part and ordered a limited deposition
of Capt. Sidor. Dkt. No. 23. The Court identified two notable deficiencies in the
Administrative Record that warranted deposing Capt. Sidor. Id. at 5. First, there is no
explanation of Capt. Sidor’s decision to take corrective action on December 7, 2016 by
referring the matter to the SBA. AR 8762. Second, after receiving SPG’s COC from the
SBA, Capt. Sidor requested documents from the SBA in order to “document the [SBA’s]
rationale behind the determination that [SPG] was a responsible contractor.” Id. at 8826.
However, the record contains no such documentation. The Court determined that a limited
deposition of Capt. Sidor was appropriate to remedy these deficiencies. Dkt. No. 23, at 6.
The Court also denied the motion in part by refusing to allow Sonoran to depose a
representative of the SBA because Sonoran never challenges the SBA’s COC
determination in its complaint. Therefore, any discovery into the SBA’s reasoning behind
issuing the COC would be irrelevant to Sonoran’s protest. Id. at 5.
While the June 15, 2017 motion to supplement the Administrative Record was being
briefed, Sonoran was also seeking access to the SBA’s records. On June 2, 2017, Sonoran
submitted a Freedom of Information Act (“FOIA”) request to the SBA for records
pertaining to the SBA’s issuance of a COC to SPG. Dkt. No. 22, Ex. A at ¶ 4. During a
conversation with a FOIA official about the request, Sonoran learned that the SBA re-
considered SPG’s COC due to a “one-time exception based on an agreement with the
[Assistant United States Attorney].” Id. at ¶ 11. As of June 27, 2017, Sonoran has not yet
received any documents associated with its FOIA request. The Government has received
these same documents directly from the SBA but determined that they are irrelevant to
Sonoran’s protest and not appropriately part of the Administrative Record. Dkt. No. 26,
Ex. 1 (email from Government counsel to Sonoran counsel). The Government denied
Sonoran’s request to view the documents. On June 22, 2017, at the parties’ request, the
Court held an informal, off-the-record, telephonic conference regarding these documents.
At that time, consistent with the Court’s June 27, 2017 Order on Sonoran’s first motion to
supplement the Administrative Record, the Court suggested that documents relating to the
SBA’s reasoning are irrelevant to this protest.
On June 27, 2017, Sonoran filed a second motion to supplement the Administrative
Record seeking the inclusion of “all records currently in possession of [the Government]
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that have not yet been disclosed related to the SBA’s decision to grant [SPG’s COC].” Dkt.
No. 26, at 2. On July 3, 2017, the Government responded opposing Sonoran’s motion and
further requesting that the Court allow Capt. Sidor to submit an affidavit in lieu of being
deposed. Dkt. No. 30, at 2. The Government also voluntarily amended the Administrative
Record with correspondence between the SBA and Air Force regarding Capt. Sidor’s
request that the SBA provide the Air Force with its rationale for issuing SPG a COC. AR
8826. First, the Government included a January 30, 2017 email from the Director of the
SBA to Mr. Mark Teskey, the Secretariat representative at the Air Force, declining Capt.
Sidor’s request as inappropriate. Id. at 9706. Second, the Government included a response
email from Capt. Sidor, also dated January 30, 2017, rescinding his request for information
from the SBA. Id. at 9709. The Government volunteered this information “in light of the
Court’s June 27, 2017 order authorizing discovery in this matter” while maintaining that it
is irrelevant. Dkt. No. 30, at 2. The parties completed briefing on Sonoran’s second motion
to supplement the Administrative Record on July 5, 2017.
Standard of Review
Under 28 U.S.C. § 1491(b)(4), the standards set forth in the Administrative
Procedure Act govern this Court’s review of a protest involving an agency’s procurement
action. Pursuant to those standards, this Court may set aside an agency’s decision or action
that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2). In its review of the agency’s action or decision, the Court
examines the Administrative Record of the procurement process to establish whether that
record supports the action or decision. Holloway & Co., PLLC v. United States, 87 Fed.
Cl. 381, 389 (2009). The Court can guard against converting the arbitrary and capricious
standard to a de novo review by limiting its review to the record as it existed before the
agency.
As the review of an agency’s procurement decision should be limited to “the
administrative record already in existence, not some new record made initially in the
reviewing court,” AshBritt, Inc. v. United States, 87 Fed. Cl. 344, 366, (2009) (quoting
Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1380 (2009)), the parties’ ability
to supplement the Administrative Record is limited. Murakami v. United States, 46 Fed.
Cl. 731, 735 (2000). However, although the Federal Circuit’s holding in Axiom makes
clear that supplementation of the Administrative Record should occur rarely, it is not
prohibited and may be used when it is necessary for the Court to gain a complete
understanding of the issues before it. Axiom Res. Mgmt., 564 F.3d at 1380. “In general,
the Court will supplement the Administrative Record when it is necessary for a full and
complete understanding of the issues.” Am. Ordnance LLC v. United States, 82 Fed. Cl.
199, 200 (2008). Thus, supplementation of the record is appropriate where the “omission
of extra-record evidence precludes effective judicial review.” AshBritt, 87 Fed. Cl. at 366.
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Discussion
The Court reiterates that the reasoning underlying the SBA’s issuance of a COC is
irrelevant to this protest. See Dkt. No. 23, at 5 (“Further discovery into the SBA’s
reasoning, however important to the Air Force’s decisions, is irrelevant to the judicial
review of issues presented in this case.”). However, this holding does not foreclose the
possibility that the SBA’s reasoning and communications with the Air Force can become
indirectly relevant insofar as they relate to the Air Force’s reasoning to take corrective
action. The Government voluntarily supplemented the Administrative Record with
communications between the SBA and the Air Force which meaningfully altered the
substance of the record in this case. The issue before the Court is whether the
Administrative Record, as it now stands, requires supplementation for the “full and
complete understanding of the issues.” Am. Ordnance LLC, 82 Fed. Cl. at 200. The
Government intended this supplementation to further explain why Capt. Sidor did not
document the SBA’s rationale for issuing a COC, as Capt. Sidor said he intended to do in
the record. However, while the January 30, 2017 email exchange between the SBA and
the Air Force explains why Capt. Sidor did not document the SBA’s reasoning, it raises
even more questions than it answers about the Air Force’s decision to take corrective
action. Based upon this new Administrative Record before the Court, limited
supplementation of SBA documents is appropriate.
Upon receiving Capt. Sidor’s request for information, the Director of the SBA sent
Mr. Teskey a strongly worded opposition stating in pertinent part:
The letter [from Capt. Sidor] is surprising, given that you and
I resolved this matter when we last spoke and emailed, prior to
the COC being issued. I fully complied and now the [Air
Force] appears to be reneging. . . . [I]f you recall, during our
conversation, the COC was not in process and did not go into
process until you expressly told me that you would be
compelled to award to SPG if you received the COC. . . . [Air
Force] is doing nothing but delaying the inevitable and
continues to harm small business. . . . I’d like to know if Capt.
Sidor is aware of our communications . . . or if he has made
you aware of his request. . . . SPG satisfied the only concern
expressed by Air Force.
AR 9705-06 (emphasis added). The SBA declined to provide any explanation of its
decision to Capt. Sidor. Id. Capt. Sidor then rescinded his request because “any further
discussions relevant to this issue must be handled at the secretariat level.” Id. at 9709. This
exchange suggests that the Air Force and the SBA have an agreement upon which the Air
Force has “reneg[ed]” and alludes to further emails on the matter. Id. at 9705. Further, it
suggests that Capt. Sidor may not have even been aware of the existence of, or substance
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of, any communication between the SBA and the Air Force at the time he was making his
decisions. Id. at 9706. Capt. Sidor’s role in these discussions, if any, could further explain
his decision to take corrective action and his belief that he needed to document the SBA’s
reasoning. Both of these holes in the Administrative Record presented by the January 30,
2017 email exchange are relevant to the Air Force’s decision to take corrective action.
Perhaps the documents Sonoran now seeks are irrelevant to the Air Force’s reasoning, but
the supplemented Administrative Record hints at further information pertinent to
understanding the Air Force’s decision-making process. Unfortunately for the
Government, its voluntary supplementation has made relevant previously irrelevant
information.
The Court is hesitant to grant Sonoran’s broad request for all documents relating to
the SBA’s COC decision in the Government’s possession. Many of these documents may
not be relevant, and motions to supplement should be narrowly granted only when
necessary to understand the relevant issues. Axiom Res. Mgmt., 564 F.3d at 1380.
However, the Court is unwilling to let the Government decide for the Court what is relevant
to its resolution of this bid protest. Thus, the Court orders the following actions:
(1) On or before July 12, 2017, the Government will
supplement the Administrative Record with all
communications, emails, and documents specifically referred
to in the January 30, 2017 email exchange. See Tabs 135 &
136.
(2) If any of the communications, emails, or documents
specifically referred to in the January 30, 2017 email exchange
are claimed to be privileged, the Government will submit those
materials in camera for the benefit of the Court’s review on or
before July 12, 2017.2 The Government shall accompany these
documents with a privilege log so that the Court may
understand the basis of the Government’s privilege claim.
Finally, the Court denies the Government’s request to substitute an affidavit for
Capt. Sidor’s deposition. For the reasons explained in the June 27, 2017 Order, a limited
deposition of Capt. Sidor is appropriate. See Dkt. No. 23. Thus, the Court’s June 27, 2017
Order remains in full effect.
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If the submission of documents in camera is necessary, the Government should provide the Court with a
single paper copy of each document in an envelope clearly labeled as in camera with this case information
visible.
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Conclusion
For the reasons explained above, Sonoran’s motion to supplement the
Administrative Record is GRANTED IN PART and DENIED IN PART. The Government
shall supplement the record with the necessary documents (barring the submission of
privileged documents in camera) on or before July 12, 2017.
IT IS SO ORDERED.
s/ Thomas C. Wheeler
THOMAS C. WHEELER
Judge
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