Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-05086/USCOURTS-ca13-15-05086-0/pdf.json

Parties Involved:
Lockheed Martin Corporation
Appellee
Northrop Grumman Systems Corporation
Appellee
Raytheon Company
Appellant
United States
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

RAYTHEON COMPANY,

Plaintiff-Appellant

v.

UNITED STATES, LOCKHEED MARTIN 

CORPORATION, NORTHROP GRUMMAN 

SYSTEMS CORPORATION,

Defendants-Appellees

______________________ 

2015-5086

______________________ 

Appeal from the United States Court of Federal 

Claims in No. 1:15-cv-00077-MMS, Judge Margaret M. 

Sweeney. 

______________________ 

Decided: October 23, 2015 

______________________ 

 MARK COLLEY, Arnold & Porter LLP, Washington, 

DC, argued for appellant. Also represented by KARA L.

DANIELS, NICOLE B. NEUMAN, PAUL E. POMPEO. 

 STEVEN MICHAEL MAGER, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for appellee United 

States. Also represented by ALEXANDER V. SVERDLOV,

KIRK T. MANHARDT, ROBERT E. KIRSCHMAN, JR., BENJAMIN 

Case: 15-5086 Document: 124-2 Page: 1 Filed: 10/23/2015
2 RAYTHEON COMPANY v. US

C. MIZER; MARK E. ALLEN, ADAM N. OLSEN, United States 

Air Force, Joint Base Andrews, MD. 

 MARCIA MADSEN, Mayer Brown LLP, Washington, 

DC, argued for appellee Lockheed Martin Corporation. 

Also represented by DAVID F. DOWD, LUKE P. LEVASSEUR. 

 RICHARD A. SAUBER, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, DC, argued 

for appellee Northrop Grumman Systems Corporation. 

Also represented by DENEEN J. MELANDER, PETER B.

SIEGAL, JENNIFER S. WINDOM. 

______________________ 

Before NEWMAN, DYK, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge.

The United States awarded a procurement contract to 

one of three bidders. A General Accountability Office 

review process, launched by the losing bidders’ protests, 

then led the government to conclude, among other things,

that it had given the bidders disparate information on an 

important subject, thereby violating a regulation that 

governs the bidding process. When the government 

reopened the bidding, the initial winning bidder protested 

the government’s reopening decision. The Court of Federal Claims denied the protest. Raytheon Co. v. United 

States, 121 Fed. Cl. 135 (2015) (public version of opinion). 

We affirm, concluding that the reopening decision was 

proper based on the disparate-information violation. We 

need not and do not address a second basis for the government’s decision to reassess its original award. 

BACKGROUND

The United States Air Force solicited bids from private companies to supply the complex mix of equipment 

and services the government was seeking to acquire in 

order to build a new radar system. Raytheon, 121 Fed. Cl. 

Case: 15-5086 Document: 124-2 Page: 2 Filed: 10/23/2015
RAYTHEON COMPANY v. US 3

at 138. The procurement process had several stages. 

Raytheon Company, Northrop Grumman Systems Corporation, and Lockheed Martin Corporation cleared earlystage hurdles, allowing them to proceed to the next stage. 

Id. at 140; J.A. 290. The Air Force issued to the three 

companies (and only them) a solicitation for proposals for 

Engineering and Manufacturing Development. Raytheon, 

121 Fed. Cl. at 140; J.A. 336–513. 

Each bidder, in supporting the price it offered, had to 

provide detailed estimates of the costs it would incur in 

performing the contract. J.A. 362–75. More specifically, 

the bidders all had to “identify and support their proposed 

cost reductions,” Raytheon, 121 Fed. Cl. at 140, i.e., their 

means of lowering the price they would charge to the Air 

Force under this contract while still performing all work 

needed to get the job done. See id. at 163; J.A. 369–74. 

The Air Force made clear from the start, and repeatedly,

that it would scrutinize each bidder’s estimates, including 

any cost-reduction means (or “affordability initiative”), to 

try to ensure that it did not choose a supplier whose price 

was unrealistic: an unrealistic price could indicate that 

the firm did not understand what was needed to do the 

job and could end up delaying completion or raising the 

cost of the radar system. Raytheon, 121 Fed. Cl. at 141, 

143 (Air Force notice to Raytheon and Northrop: “It is 

imperative the Offeror substantiate and the Government 

fully understand any claimed initiative which the Offeror 

desires to incorporate into its proposed cost/price.”); J.A.

362, 394, 398–99, 1209, 1214, 1228, 50839–40. 

Raytheon, Northrop, and Lockheed submitted bids. 

Raytheon, 121 Fed. Cl. at 142. The Air Force thereafter 

sent Evaluation Notices to Raytheon and Northrop that 

addressed one means of reducing the costs that had to be 

built into the price for the radar-system contract—

namely, treatment of certain costs as independent research and development (IR & D) costs. That classification addresses research conducted by a contractor but not 

Case: 15-5086 Document: 124-2 Page: 3 Filed: 10/23/2015
4 RAYTHEON COMPANY v. US

specifically for a particular government project. See 48 

C.F.R. §§ 31.205-18, 9904.420. Although such work is 

contract-independent, its fruits can actually help the 

contractor deliver the goods and services promised in a 

particular contract. When that is so, the cost of work 

implicitly needed for a particular contract, which otherwise might have to be built into the price for that contract, may instead be treated as an IR & D cost, in which 

case the contractor may recover it through other means 

(such as, where allowed, by allocation across a wide range 

of government or private contracts). 48 C.F.R. § 31.205-

18. The result is a “cost reduction” for the particular 

contract without compromising the contractor’s ability to 

fulfill its promises in that contract.

In this case, the Air Force, citing a Federal Acquisition Regulation (FAR) provision, stated in its initial

notices to Raytheon and Northrop on the subject: “In 

accordance with (IAW) FAR 31.205-18 and 10 USC 2320

[sic], any cost claimed or considered to be IR & D or a 

capital investment shall not be allowable as indirect 

charges for work implicitly required for performance 

(necessary to perform the contract) or explicitly required 

to be done by the terms of the contract.” J.A. 1210, 1215, 

quoted in Raytheon, 121 Fed. Cl. at 143. “In other words,” 

as the Court of Federal Claims said, “the contractors 

would not be permitted to use IR & D costs to reduce their 

costs of performing the . . . contract if those costs were 

implicitly or explicitly required for contract performance.” 

Raytheon, 121 Fed. Cl. at 163–64 (emphasis added).

In response, Northrop did not take issue with the 

agency’s statement precluding treatment of the cost of 

“implicitly required” work as an IR & D cost. See id. at 

143. The Court of Federal Claims found that Northrop 

“raised no objections to the Air Force’s statements regardCase: 15-5086 Document: 124-2 Page: 4 Filed: 10/23/2015
RAYTHEON COMPANY v. US 5

ing the allowability of IR & D costs.” Id. at 165.1 Raytheon, in contrast, did object. Raytheon told the agency that 

its statement was contrary to ATK Thiokol, Inc. v. United 

States, 598 F.3d 1329, 1334–35 (Fed. Cir. 2010), which, 

Raytheon said, “held that research and development costs 

are allowable as IR & D costs unless specifically required 

by the contract.” J.A. 1218, quoted in Raytheon, 121 Fed. 

Cl. at 143. 

What occurred thereafter is undisputed in the respects relevant to our decision. The Air Force changed its 

view: “the Air Force’s understanding changed to conform 

1 That finding refers to Northrop’s response to one 

of the Evaluation Notices, but it is true more generally.

The Court of Federal Claims also stated that “[d]uring 

the first round of discussions, Northrop unambiguously

disclaimed any reliance on IR & D cost reductions in 

response to one [Evaluation Notice].” Id. We read that 

statement as finding only that Northrop at the time was 

not relying on IR & D cost reductions, not that Northrop 

disclaimed the possibility of relying on IR & D cost reductions if the Air Force permitted. The broader reading 

would be unsupported. Earlier in the Court of Federal 

Claims’ opinion, where details are given, the only pertinent specific finding about Northrop’s responses to the Air 

Force quotes Northrop as saying simply that “‘[t]he 

execution of this contract does not require . . . IR & D 

funding,’” id. at 142 (emphasis added), which does not 

make any disclaimers about whether Northrop would use 

IR & D funding if permitted. And in its complaint in this 

case, Raytheon acknowledged that “the GAO attorney 

[who gave the prediction of the GAO’s view that led the 

Air Force to reopen the award to Raytheon] said that 

Northrop had not disclaimed any possibility of relying on 

future IR&D in the event the Agency took a different 

view.” J.A. 72.

 

Case: 15-5086 Document: 124-2 Page: 5 Filed: 10/23/2015
6 RAYTHEON COMPANY v. US

to Raytheon’s interpretation; the [Evaluation Notices] 

that the Air Force had sent to Raytheon and Northrop no 

longer reflected its position on the allowability of IR & D 

costs related to implicit contract requirements.” Raytheon, 121 Fed. Cl. at 147; id. at 164; J.A. 1837–39. The Air 

Force communicated its new view to Raytheon, in substance if not in words, by accepting Raytheon’s treatment 

of certain costs as IR & D costs. In contrast, the Air Force 

never communicated its new view to Northrop—whose 

last communication on the subject from the government 

therefore remained the earlier, contrary view. “Thus, as 

far as Northrop was aware, the Air Force would not 

accept IR & D cost reductions for work implicitly required 

for contract performance.” Raytheon, 121 Fed. Cl. at 164; 

see id. at 165, 166. 

When the bidders later submitted their final proposals, Raytheon “proposed IR & D cost reductions” of a 

certain amount, id. at 167, whereas Northrop did not 

“propos[e] IR & D cost reductions in line with the IR & D 

cost reductions proposed by Raytheon,” id. at 146. The 

Air Force judged all three bidders to be in technical 

compliance, rated them the same on “all three technical 

subfactors,” and found “that all of the proposed costs and 

prices were reasonable and realistic.” Id. at 145. Raytheon had offered “the lowest total price” in the initial round 

of proposals, id. at 142, and in the final proposals, Raytheon received “the lowest Best Value Assessment,” id. at 

145 (brackets deleted), a figure dependent on the final 

proposed prices, id. at 141. See also id. at 167 (noting 

“differential in proposed prices” between Northrop and at 

least Raytheon). On that basis, the Air Force awarded 

the contract to Raytheon. Id. at 145.

Northrop and Lockheed filed a series of protests with 

the Government Accountability Office under 31 U.S.C. 

§ 3551 et seq. See Raytheon, 121 Fed. Cl. at 145–46. In 

one of the protests, Northrop challenged the Air Force’s 

Case: 15-5086 Document: 124-2 Page: 6 Filed: 10/23/2015
RAYTHEON COMPANY v. US 7

communications about treating certain costs as IR & D

costs. Id. at 146. The Air Force defended its conduct. Id. 

After a hearing before the GAO, “the GAO attorney 

assigned to the protests invited counsel for the parties to 

participate in an alternative dispute resolution outcome 

prediction conference,” at which the attorney would 

inform the parties how she was drafting a written decision for the GAO, though there had not yet been a decision. Id. at 148. In the conference held on January 15, 

2015, the GAO attorney advised that, if the case proceeded to a final decision, it was “highly likely” that the GAO 

would sustain the protests “on only two grounds.” Id. 

One of the grounds concerned IR & D costs: “the Air 

Force’s discussions with Northrop [on that subject] were 

misleading and unequal.” Id. at 149. The GAO attorney 

“recommended that the Air Force . . . reopen cost/price 

discussions with all three contractors to explain its current view of the allowability of IR & D costs[ ] and permit 

the submission of new final proposal revisions.” Id. 

The next day, in response to the GAO’s prediction, the 

Air Force wrote a letter to the GAO, with copies to the 

parties, saying that it had “decided to take corrective 

action.” J.A. 2239, quoted in Raytheon, 121 Fed. Cl. at 

149. In particular, it stated that it “intend[ed] to reopen 

discussions with all offerors to clarify the allowability of 

Independent Research and Development (IR & D) as it 

relates to the cost/price evaluation.” Id. 

Raytheon filed a protest in the Court of Federal 

Claims under 28 U.S.C. § 1491(b) to challenge the Air 

Force’s decision to take corrective action. Raytheon, 121 

Fed. Cl. at 149. Following § 1491(b)(4)’s directive to apply 

the standards set forth in the Administrative Procedure 

Act, the court considered whether the Air Force’s decision 

to take corrective action “lacked a rational basis or involved a violation of regulation or procedure.” Raytheon, 

121 Fed. Cl. at 150. Under those standards, the court 

Case: 15-5086 Document: 124-2 Page: 7 Filed: 10/23/2015
8 RAYTHEON COMPANY v. US

sustained the Air Force’s decision, and rejected Raytheon’s challenge, on the administrative record. Id. at 167–

68.

In particular, the court made the findings recited 

above regarding the Air Force’s disparate communication 

of its views about treating certain costs as IR & D costs. 

Among other things, it held that, by advising Raytheon 

but not Northrop “that it would accept IR & D cost reductions notwithstanding the language of its [Evaluation 

Notices,] the Air Force engaged in unequal discussions 

with the contractors.” Id. at 165. Quoting a regulatory 

command in the FAR that bars an acquiring agency from 

engaging in “conduct that . . . [f]avors one offeror over 

another,” 48 C.F.R. § 15.306(e)(1), the court explained

that “[d]iscussions are unequal when a procuring agency 

favors ‘one offeror over another.’” Raytheon, 121 Fed. Cl. 

at 164. Accordingly, the court held, the GAO attorney’s 

conclusion to that effect “was rational, and the Air Force’s 

reliance on her conclusion in deciding to take corrective 

action was also rational.” Id. at 165. 

The court went on to reject Raytheon’s argument that 

Northrop had not shown that the Air Force’s conduct 

prejudiced Northrop. The court ruled that “the GAO 

attorney . . . implicitly concluded that Northrop had 

established that it was prejudiced by the Air Force’s 

misleading and unequal discussions,” i.e., that “Northrop 

had a substantial chance of receiving the contract in the 

absence of the Air Force’s misleading and unequal discussions.” Id. at 167. The court held that conclusion to be 

rational, noting Northrop’s size as a government contractor, the Air Force’s equal technical ratings of the bidders, 

the difference in the final proposed prices of Raytheon and 

Northrop, Raytheon’s proposed IR & D cost reductions, 

and, therefore, Northrop’s financial means to propose IR

& D cost reductions of its own that could overcome the 

“differential in proposed prices.” Id. 

Case: 15-5086 Document: 124-2 Page: 8 Filed: 10/23/2015
RAYTHEON COMPANY v. US 9

Raytheon appeals. We have jurisdiction under 28 

U.S.C. § 1295(a)(3). We now affirm.

DISCUSSION

A 

Raytheon accepts that, for us to uphold the Air Force 

decision to reopen the bidding process, it is sufficient for 

us to conclude that the grounds relied on by the Air 

Force—here, the grounds informally set out by the GAO 

attorney in predicting the GAO’s likely ruling on the 

protests of the initial award to Raytheon—rationally 

justified the reopening under governing law. See Raytheon Opening Br. 51. We agree that such a conclusion 

suffices under the standards of the Administrative Procedure Act, which are incorporated by the bid-protest provision under which this case was brought. 28 U.S.C. 

§ 1491(b)(4); see Banknote Corp. of America v. United 

States, 365 F.3d 1345, 1350 (Fed. Cir. 2004) (following 5 

U.S.C. § 706(2)(A) for bid-protest cases). Moreover, we 

have upheld agency corrective actions taken on the basis 

of formal GAO determinations where the GAO determinations were rational. Honeywell, Inc. v. United States, 870 

F.2d 644, 647 (Fed. Cir. 1989); Turner Construction Co. v.

United States, 645 F.3d 1377, 1383 (Fed. Cir. 2011). 

Although this case involves a GAO outcome prediction, 

rather than a GAO decision, Raytheon accepts, and we 

agree, that rationality of the GAO outcome prediction 

should suffice. In stating what grounds are sufficient to 

uphold the bid reopening, we do not and need not say 

what grounds are necessary. 

We conclude that the Air Force’s unequal communications regarding IR & D accounting, one of the GAO attorney’s grounds, provide a rational basis for the reopening. 

In 10 U.S.C. § 2305(f)(1), Congress provided that “[i]f, in 

connection with a protest, the head of an agency determines that [an] . . . award does not comply with the 

requirements of law or regulation, the head of the agenCase: 15-5086 Document: 124-2 Page: 9 Filed: 10/23/2015
10 RAYTHEON COMPANY v. US

cy . . . may take any action set out in” 31 U.S.C. 

§ 3554(b)(1)(A)–(F), and it is not disputed that the permitted actions include reopening of the bidding process here. 

See also 4 C.F.R. § 21.8 (GAO authority to recommend 

corrective actions, including where an “award does not 

comply with statute or regulation”); 48 C.F.R.

§ 33.102(b)(1) (similar for agency decision on protest). 

We conclude, agreeing with the GAO attorney, Air Force, 

and Court of Federal Claims, that the Air Force violated a 

regulation by its disparate communications regarding the 

treatment of costs as IR & D costs, a matter of potentially 

great importance to the bidder’s final bidding decisions. 

That violation provides a rational basis for reopening. 

Under 48 C.F.R. § 15.306(e)(1), “[g]overnment personnel involved in the acquisition shall not engage in conduct 

that—(1) Favors one offeror over another.” That regulation, in its common-sense meaning in the context of 

competitive bidding, requires that the agency avoid giving 

materially disparate information to bidders on matters 

that could easily affect their decisions about important 

aspects of the final competing offers that the agency will 

be comparing. See, e.g., AshBritt, Inc. v. United States, 87 

Fed. Cl. 344, 368–69 (2009); Metcalf Construction Co. v.

United States, 53 Fed. Cl. 617, 625, 633–35 (2002); Dynacs

Engineering Co. v. United States, 48 Fed. Cl. 124, 133–34 

(2000). The Air Force violated that requirement in communicating an important position on cost accounting to 

Raytheon and Northrop, changing that position, then 

telling Raytheon but not Northrop of the change. Specifically, the Air Force made clear to Raytheon that it could 

broadly use IR & D accounting—a matter of clear potential importance to the bottom-line prices of the final 

bids—and did not give the same information to Northrop, 

leaving Northrop but not Raytheon to rely on the contrary 

position the Air Force had earlier stated to the two bidders. That disparity in information favored Raytheon 

over Northrop, in violation of the regulation.

Case: 15-5086 Document: 124-2 Page: 10 Filed: 10/23/2015
RAYTHEON COMPANY v. US 11

We also conclude that it was proper for the Court of 

Federal Claims to infer that the GAO attorney implicitly 

found that the violation was prejudicial. Raytheon, 121 

Fed. Cl. at 167. In many contexts, officials are presumed 

to be following the law governing their actions. See, e.g., 

United States v. Chem. Found., Inc., 272 U.S. 1, 14–15 

(1926) (“The presumption of regularity supports the 

official acts of public officers, and, in the absence of clear 

evidence to the contrary, courts presume that they have 

properly discharged their official duties.”); Nat’l Archives 

& Records Admin. v. Favish, 541 U.S. 157, 174 (2004); 

PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 

1304 (Fed. Cir. 2008) (agency is “presumed to have 

properly done its job”). Here, in the absence of a written 

decision from the GAO—an absence inherent in the 

outcome-prediction situation presented—it is proper to 

presume that the GAO attorney was relying on the legal 

standards the GAO would have applied in deciding the 

protest, which include consideration of prejudice, 4 C.F.R. 

§ 21.8(b), under the “substantial chance” standard applicable in bid protests in court, In re Lockheed Martin 

Integrated Systems, Inc., B-408134.3, B-408134.5, 2013 

CPD ¶ 169, 2013 WL 3830053, at *5 (Comp. Gen. July 3, 

2013) (“Competitive prejudice is an essential element of a 

viable protest; where the protester fails to demonstrate 

that, but for the agency’s actions, it would have had a 

substantial chance of receiving the award, there is no 

basis for finding prejudice, and our Office will not sustain 

the protest.”). And that presumption finds confirmation 

in this case because notes from the outcome-prediction 

conference refer to the GAO attorney’s remarks about 

prejudice in discussing at least one of the protests at 

issue. J.A. 2213, 2215. 

On the merits of the prejudice issue, we agree with 

the Court of Federal Claims’ determination that there 

was a sufficient factual basis for the GAO attorney, and 

hence the Air Force, to find a “substantial chance” that 

Case: 15-5086 Document: 124-2 Page: 11 Filed: 10/23/2015
12 RAYTHEON COMPANY v. US

Northrop would have received the award. Raytheon, 121 

Fed. Cl. at 167. That standard does not require a finding 

that a losing bidder “would have received the contract.” 

Id.; see Bannum, Inc. v. United States, 404 F.3d 1346, 

1358 (Fed. Cir. 2005). On this issue, which is a question 

of fact, Advanced Data Concepts, Inc. v. United States, 216 

F.3d 1054, 1057 (Fed. Cir. 2000), the implicit finding by 

the GAO attorney, and hence the Air Force, was properly 

reviewed deferentially by the Court of Federal Claims in 

its ruling on the administrative record. We have recited 

the public evidence in support of the prejudice finding, 

focused on what Northrop could have done to shrink the 

“differential in proposed prices” in the final offers had it 

known what Raytheon knew about the Air Force’s change 

of position regarding treatment of costs as IR & D costs. 

Raytheon, 121 Fed. Cl. at 167. Confidential portions of 

the record bolster the public basis for finding prejudice. 

We conclude that the Court of Federal Claims properly 

upheld the implied finding of prejudice from the disparate-information violation.

B 

Raytheon’s challenges do not undermine the foregoing 

rationale for upholding the Air Force’s reopening of the 

bidding based on the disparity between what the Air 

Force told Raytheon and what it told Northrop about the 

permissibility of treating certain costs as IR & D costs.

1. Raytheon contends that Northrop waived its challenge on this ground by failing to complain to the Air 

Force before the award was made. Raytheon Br. 49–50. 

That contention relies on decisions establishing a general 

rule that a losing bidder waives a post-award challenge to 

the terms of a solicitation if it does not object to the terms 

before the bidding process closes. See Bannum, Inc. v. 

United States, 779 F.3d 1376, 1380 (Fed. Cir. 2015); 

COMINT Systems Corp. v. United States, 700 F.3d 1377, 

1381–82 (Fed. Cir. 2012); Blue & Gold Fleet, L.P. v. 

Case: 15-5086 Document: 124-2 Page: 12 Filed: 10/23/2015
RAYTHEON COMPANY v. US 13

United States, 492 F.3d 1308, 1315 (Fed. Cir. 2007); 

Statistica, Inc. v. Christopher, 102 F.3d 1577, 1582 (Fed. 

Cir. 1996). But that principle does not apply to the disparate-information violation here. 

The disparate-information violation was not an error 

in the solicitation. It occurred during the Air Force’s postsolicitation process of discussion and evaluation, and 

Northrop had no reason to know before the award was 

made that the Air Force had changed its mind about IR & 

D costs and had told Raytheon but not Northrop of the 

change. See Raytheon, 121 Fed. Cl. at 166. This kind of 

violation has not been, and cannot sensibly be, subject to 

a requirement of objection before the bidding closes. See 

Bannum, 779 F.3d at 1381 (“at least as a general matter, 

a bidder cannot be expected to challenge an agency’s 

evaluation of bids, in contrast to the terms of solicitation, 

until the evaluation occurs”); COMINT, 700 F.3d at 1383 

n.6 (not applying waiver principle to challenge to agency 

action during evaluation process that challenger did not 

learn of until the award).

2. Raytheon also argues that, under this court’s decision in ATK Thiokol, the Air Force’s position expressly set 

forth in its initial IR & D announcement was so clearly 

inconsistent with the FAR regulation cited in that announcement that this court must attribute to all bidders, 

including Northrop, knowledge of the correct understanding of IR & D treatment as a matter of law. Raytheon 

relies on attribution-of-knowledge reasoning in cases from 

other contexts, cases that resolve non-regulatory, nonprotest issues distinct from the issues presented here. See 

Raytheon, 121 Fed. Cl. at 166 (noting cases that involve 

claims for rescission or reformation of contracts). Raytheon seeks to extend the attribution idea to this context. It 

contends that all bidders (hence Northrop) must be 

deemed to have had the same information as Raytheon (so 

that there was no unequal information) as a matter of 

law. Raytheon Br. 36–49. This contention is independent 

Case: 15-5086 Document: 124-2 Page: 13 Filed: 10/23/2015
14 RAYTHEON COMPANY v. US

of the circumstances of any particular bidder in the process.

The premise of Raytheon’s argument is that the Air 

Force’s initial view was clearly inconsistent with the cited 

FAR provision—an inconsistency that the Air Force did 

not initially perceive and that Northrop questions. But 

we need not rule on the soundness of that premise. Even 

without so ruling, we reject extension of the attributionof-knowledge idea to cover the situation before us. 

The Air Force communicated disparate information to 

Raytheon and Northrop about its position regarding 

treatment of certain costs as IR & D costs. That disparity

cannot be dismissed as a matter of law unless we can say 

that the information about the Air Force’s position simply 

could not have mattered in the bidding process (on the 

assumption that Raytheon is right about ATK Thiokol). 

Raytheon’s argument seeks to deny the facially evident 

regulatory violation based on disparate information by 

establishing that the particular information at issue—

regarding the Air Force’s position on IR & D costs—so 

clearly could not matter to bidders that it must be disregarded. We do not think that Raytheon has carried its 

burden of justifying that conclusion. 

3. Raytheon argues that Northrop in particular was 

not prejudiced by remaining in the dark about the Air 

Force’s revised view on the treatment of certain costs as 

IR & D costs. At bottom, Raytheon argues that Northrop 

would not have taken significant advantage of the new 

permissive approach to IR & D costs if it had known of the 

Air Force’s change of position before submitting its final 

bid. Raytheon Br. 50–60. Raytheon’s argument presents 

a record-specific question. The question is what Northrop 

might have done in its final offer had it been told of the 

new Air Force position. We think that the GAO attorney 

and the Air Force had sufficient reason to find prejudice 

Case: 15-5086 Document: 124-2 Page: 14 Filed: 10/23/2015
RAYTHEON COMPANY v. US 15

under a substantial-chance standard, as the Court of 

Federal Claims held and as discussed above.

At least in these circumstances, and perhaps more 

generally, there also is no basis for invoking a regulation 

that permits the government to “tailor” its discussions to 

particular bidders, 48 C.F.R. § 15.306(d)(1), to somehow 

negate or excuse the unequal-information violation. 

Accordingly, we hold that the government committed no 

error in reopening the bidding based on that violation. 

C 

The Air Force offered a second reason for reassessing 

its award to Raytheon—based, like the first, on the 

statements of the GAO attorney about a likely GAO 

ruling on the protests of that award. In particular, Raytheon had made changes to the technology it was offering 

after the Air Force had conducted a technology assessment in an earlier round of the development process. The 

Air Force, following the GAO attorney, concluded that, in 

its final review leading to the award, it had not followed 

solicitation requirements for ensuring substantiation of 

the “technology readiness” of the altered “critical technology element” and therefore had to reassess Raytheon’s 

proposal. Raytheon, 121 Fed. Cl. at 148–49. 

The Court of Federal Claims upheld that Air Force 

determination. Id. at 160–63. But we need not address 

the issue. Raytheon has not offered, and we do not see, 

any reason that this technology-reassessment issue 

should be decided once we have concluded that the Air 

Force properly reopened the bidding process because of 

the unequal-information violation.

CONCLUSION

We affirm the judgment of the Court of Federal 

Claims denying Raytheon’s protest. 

No costs.

Case: 15-5086 Document: 124-2 Page: 15 Filed: 10/23/2015
16 RAYTHEON COMPANY v. US

AFFIRMED

Case: 15-5086 Document: 124-2 Page: 16 Filed: 10/23/2015