In the United States Court of Federal Claims

No. 15-77C 

(Filed Under Seal: June 5, 2015)

(Reissued: June 18, 2015)*

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RAYTHEON COMPANY, * 

*

Plaintiff, *

*

 v. *

*

THE UNITED STATES, *

*

Defendant, *

*

and *

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LOCKHEED MARTIN CORPORATION *

and NORTHROP GRUMMAN SYSTEMS *

CORPORATION, *

*

Defendant-Intervenors. *

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OPINION AND ORDER ON PLAINTIFF’S RCFC 62(c) MOTION

In this bid protest, plaintiff Raytheon Company (“Raytheon”), the contract awardee,

challenges the decision of the United States Air Force (“Air Force”) to take corrective action

based on the statements made by a Government Accountability Office (“GAO”) attorney during

an outcome prediction conference held in conjunction with protests lodged by defendantintervenors Lockheed Martin Corporation (“Lockheed”) and Northrop Grumman Systems

Corporation (“Northrop”). In a May 11, 2015 Opinion and Order, the court denied Raytheon’s

motion for judgment on the administrative record and granted the remaining parties’ crossmotions for judgment on the administrative record, allowing the Air Force to proceed with its

proposed corrective action. Presently before the court is Raytheon’s motion for a stay of the

court’s judgment and to enjoin the Air Force from proceeding with its proposed corrective action

or awarding a new contract pending appeal. For the reasons set forth below, the court denies

Raytheon’s motion. 

*

 This reissued Opinion and Order incorporates the agreed-to redactions proposed by the

parties on June 17, 2015. The redactions are indicated with bracketed ellipses (“[. . .]”).
I. BACKGROUND

Several years ago, the Air Force initiated the Three-Dimensional Expeditionary LongRange Radar (“3DELRR”) acquisition program to replace its existing AN/TPS-75 radar system.1

Slip op. 2. During the current phase of the procurement–Engineering and Manufacturing

Development (“EMD”)–Raytheon, Lockheed, and Northrop submitted proposals to further

develop, build, and test a radar system. Id. at 5. The Air Force determined that all of the

proposals were technically acceptable and ultimately awarded the EMD contract to Raytheon. Id.

at 14. In postaward debriefings, the Air Force disclosed the price of the contract it awarded to

Raytheon to Lockheed and Northrop. Id. at 15.

Both Lockheed and Northrop protested the Air Force’s award decision at the GAO. Id. 

After extensive proceedings, id. at 15-18, the GAO attorney assigned to the protest held an

alternative dispute resolution outcome prediction conference with the parties, id. at 19. During

the conference, the GAO attorney advised the parties that she anticipated sustaining the protests

on two grounds: (1) the Air Force erred in its technical evaluation of Raytheon’s proposal and

(2) the Air Force conducted unequal and misleading discussions regarding the parties’ cost/price

proposals. Id. at 19-20. She therefore recommended that the Air Force take corrective action to

cure the defects that she identified. Id. at 20. The following day, the Air Force indicated that

based on the GAO attorney’s statements during the outcome prediction conference, it would take

corrective action to cure the identified defects. Id. As a result, the GAO dismissed the protests

lodged by Lockheed and Northrop as moot. Id. 

Shortly thereafter, on January 26, 2015, Raytheon filed the current bid protest, arguing

that the Air Force’s decision to take corrective action was arbitrary, capricious, and unreasonable

because the GAO attorney’s determinations were themselves unreasonable. Id. at 21. The

parties fully briefed cross-motions for judgment on the administrative record and the court heard

argument. Id. at 21-22. Ultimately, in its May 11, 2015 Opinion and Order, the court concluded

that the GAO attorney’s determinations were reasonable and that the Air Force’s decision to take

corrective action based on those determinations was therefore rational. Id. at 34-44. 

Consequently, it denied Raytheon’s protest. Id. at 44-45. The clerk entered judgment on May

13, 2015. 

The following day, Raytheon filed a notice of appeal. It also filed a motion seeking to

stay the court’s judgment and enjoin the Air Force from either proceeding with its proposed

corrective action or awarding a new contract pending appeal. The parties have fully briefed

1

 With one exception, the court derives the facts in this decision from its May 11, 2015

Opinion and Order (“Slip op.”), which contains a full recitation of the pertinent factual and

procedural history. The remaining fact is a quotation from the solicitation that appears in the

administrative record (“AR”); the court paraphrased this quotation in its May 11, 2015 Opinion

and Order.

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Raytheon’s motion pursuant to an expedited briefing schedule set by the court. The court deems

oral argument unnecessary.

II. DISCUSSION

Raytheon moves to stay the court’s judgment and enjoin the Air Force from proceeding

with its proposed corrective action pending appeal pursuant to Rule 62(c) of the Rules of the

United States Court of Federal Claims (“RCFC”), which provides: “While an appeal is pending

from an interlocutory order or final judgment that grants, dissolves, or denies an injunction, the

court may suspend, modify, restore, or grant an injunction on terms for bond or other terms that

secure the opposing party’s rights.” In entertaining a motion under RCFC 62(c), the court

considers four factors: (1) whether the moving party has made a strong showing that it is likely

to succeed on the merits; (2) whether the moving party will be irreparably injured absent the

requested relief; (3) whether requested relief will substantially injure the other parties interested

in the proceeding; and (4) the public interest. Hilton v. Braunskill, 481 U.S. 770, 776 (1987);

Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir. 1990); Alaska

Cent. Express, Inc. v. United States, 51 Fed. Cl. 227, 229 (2001). The court need not assign each

factor equal weight. Standard Havens Prods., 897 F.2d at 512. Consequently, relief is

appropriate where the moving party “‘establishes that it has a strong likelihood of success on

appeal, or where, failing that, it can nonetheless demonstrate a substantial case on the merits,’

provided the other factors militate in [its] favor.” Id. at 513 (quoting Hilton, 481 U.S. at 778). 

And, when the equitable factors weigh decidedly in the moving party’s favor, “‘it will ordinarily

be enough that the [moving party] has raised questions going to the merits so serious, substantial,

difficult and doubtful, as to make them a fair ground for litigation . . . .’” Id. (quoting Hamilton

Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir. 1953)); accord Alaska Cent.

Express, 51 Fed. Cl. at 230 (“[I]f the equities weigh heavily in favor of maintaining the status

quo, this court may grant an injunction under RCFC 62(c) where the question raised is novel or

close, especially when the case will be returned to the trial court should the movant succeed.”). 

A. Likelihood of Success on the Merits

Raytheon first contends that it is likely to succeed on the merits of its appeal, asserting

that the court erred by upholding the Air Force’s decision to take corrective action with respect to

both the technical evaluation of Raytheon’s proposal and the cost/price discussions. The court

begins by addressing the technical evaluation issue. 

1. The Technical Evaluation of Raytheon’s Proposal

a. Factual Background

During an earlier phase of the 3DELRR procurement, a team of independent subjectmatter experts (“independent review team”) with expertise in radar system design, hardware,

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software, testing, and signal processing prepared a Technology Readiness Assessment report for

each offeror’s proposed radar system. Slip op. 2-3. In those reports, the independent review 

team identified the radar systems’ critical technology elements (“CTEs”) and assigned each CTE

a Technology Readiness Level (“TRL”). Id. at 2. Raytheon’s CTE 1 was its Gallium Nitride

High Power Amplifier [. . .] (“GaN HPA [. . .]”), a [. . .] its proposed radar system’s [. . .]

subsystem. Id. at 3-4. However, notwithstanding its initial description of Raytheon’s CTE 1 as

the GaN HPA [. . .], the independent review team considered two components of the [. . .]–the

GaN HPA and [. . .]–as the new and novel critical technologies that required TRL assessment. 

Id. at 4-5. 

In the solicitation for the current phase of the 3DELRR procurement, the Air Force

described the proposal requirements and its evaluation criteria. Id. at 5-7. In paragraph 5.3.1.3

of section L of the solicitation, the Air Force indicated that offerors were to provide the following

information in their technical proposals: “The Offeror shall identify all critical technology

elements (CTEs) of the design solution that have changed since [the pre-EMD phase of the

procurement] . . . . For each modified/new CTE identified, provide the current TRL, the source

of the rating, and full substantiation with supporting data.” AR 41250; accord Slip op. 5. 

Pursuant to paragraph 2.4.1.3 of section M of the solicitation, the Air Force would evaluate

whether the technical proposals met the stated requirements “based on,” in part: “Substantiation

of at least a Technology Readiness Level 6 (TRL 6) for all Critical Technology Elements (CTEs)

of the design solution that have changed since the Pre-EMD Preliminary Design Review (PDR). 

One CTE must be a Gallium Nitride (GaN) High Power Amplifier (HPA)-based

Transmit/Receive (T/R) module.” Slip op. 7.

In its technical proposal, Raytheon did not describe any significant changes to its [. . .]

subsystem, and expressly represented that since the pre-EMD period, it had not introduced any

“new technologies” to its “design solution.” Id. at 7-8. Raytheon further represented that its

CTEs had not changed and that its radar system prototype “successfully demonstrated all PreEMD phase CTEs at TRL 6 and the overall design maturity in a relevant environment.” Id. at 8. 

However, Raytheon did change the design of its CTE 1 by [. . .]. Id. Raytheon acknowledged

this change during discussions in its response to an Evaluation Notice (“EN”) issued by the Air

Force in which the Air Force requested information regarding Raytheon’s proposed production

cost savings. Id. at 9. Specifically, Raytheon noted:

[. . .]

Id. The Air Force reviewed this response and ultimately deemed the discussion issue resolved. 

Id. 

When evaluating the offerors’ final proposal revisions, the Air Force’s technical

evaluators reviewed Raytheon’s proposal for compliance with the solicitation’s technical

requirements. Id. at 13. These technical evaluators were advised by four members of the original

independent review team. Id. With respect to the requirement that the offerors substantiate TRL

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6 ratings for each of the CTEs that had changed since the pre-EMD period, Kevin Ray, the chief

evaluator for the relevant technical subfactor, remarked:

Raytheon substantiated all criteria listed in Section M 2.4.1.3.

The Technology Readiness Assessment (TRA) Independent Review Team

(IRT) assessed all Raytheon’s Critical Technology Elements (CTEs) at

Technology Readiness Level 6 (TRL 6) during the Pre-Engineering and 

Manufacturing Development (Pre-EMD) Period of the Technology Development

(TD) Phase. Raytheon listed the same CTEs in the EMD proposal as those

identified in the Pre-EMD Period. In addition, Raytheon identified one CTE as a

Gallium Nitride (GaN) High Power Amplifier (HPA)-based Transmit/Receive

(T/R) module which met the Government’s requirement.

TRA IRT members reviewed and analyzed Volume II, Paragraph 1.3,

Pages II-86 to II-88. The IRT members confirmed the CTEs listed were the

original CTEs approved by the team in 2013 and there were no changes to the

CTEs since the Pre-EMD Period Preliminary Design Review (PDR) where

Raytheon was assessed at TRL 6. Raytheon described each CTE in the following

Volume II pages.

1. Pages II-19 to II-21 and the classified Volume IIA, Figure IIA-1.0.1-6

System Architecture for the T/R Line Replaceable Unit (LRU) and the

receive LRU.

Id. at 13-14.

In its protest before the GAO, Lockheed challenged the Air Force’s technical evaluation

of Raytheon’s CTE 1, arguing that because Raytheon’s proposed GaN HPA [. . .] was different

from the GaN HPA [. . .] it demonstrated during the pre-EMD period, the Air Force improperly

considered Raytheon’s CTE 1 to be assessed at TRL 6. Id. at 16. During a hearing convened by

the GAO, Mr. Ray testified that the Air Force (1) considered the GaN HPA and [. . .] as the new

and novel critical technologies that required TRL assessment; (2) did not consider the circulator

to be a critical technology; (3) determined that although [. . .] the circulator [. . .] would require 

[. . .] to be redesigned, neither of the critical technologies in CTE 1 (the GaN HPA and [. . .])

were affected by the design change; (4) did not believe that [. . .] the circulator would impact

performance; and (5) did not request, and Raytheon did not provide, any information regarding

the proposed redesigned [. . .], such as the new design or test data. Id. at 17. Upon considering

all of the evidence, the GAO attorney advised the parties during the outcome prediction

conference that she intended to sustain Lockheed’s protest on this issue. Id. at 19-20. She stated

that the record reflected that Raytheon’s CTE 1 was the [. . .] GaN HPA [. . .], not just the GaN

HPA and [. . .], and that Raytheon’s [. . .], as redesigned with the circulator [. . .], was never

tested. Id. at 19. Accordingly, she opined that the Air Force erred in concluding that Raytheon’s

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CTE 1 was at TRL 6. Id. at 20. The Air Force decided to take corrective action based on the 

GAO attorney’s determinations. Id. 

b. The Court’s Ruling

Based on the evidence in the administrative record, the court concluded that the Air Force

did not comply with the evaluation scheme set forth in the solicitation. Specifically, it explained:

Based on the contemporaneous evidence contained in the administrative

record, it is readily apparent that despite the various labels used to denote

Raytheon’s CTE 1, the independent review team and the Air Force’s technical

evaluators focused their evaluation of the maturity of Raytheon’s CTE 1 on the

new and novel aspects of the GaN HPA [. . .]–the GaN HPA and [. . .]. Indeed,

neither the members of the independent review team nor the Air Force’s technical

evaluators–the individuals with the relevant knowledge and expertise–expressed

any concern that the introduction of COTS circulators or the [. . .] would affect the

TRL of Raytheon’s CTE 1. 

Normally, a procuring agency’s technical assessments, such as the ones

made by the Air Force with respect to Raytheon’s CTE 1, must be afforded the

greatest possible deference. E.W. Bliss Co. v. United States, 77 F.3d 445, 449

(Fed. Cir. 1996); Beta Analytics Int’l, Inc. v. United States, 67 Fed. Cl. 384, 395

(2005) (“The evaluation of proposals for their technical excellence or quality is a

process that often involves the special expertise of procurement officials, and thus

reviewing courts give the greatest deference possible to these determinations.”). 

. . . In light of the highly deferential standard applicable in these circumstances,

the court has no difficulty concluding, based on the evidence in the administrative

record, that the independent review team and the Air Force’s technical evaluators

reasonably assessed that the design change proposed by Raytheon would not

affect the TRL of Raytheon’s CTE 1. The members of the independent review

team in particular possessed expertise in radar system design, hardware, software,

testing, and signal processing, and it is eminently reasonable to conclude that they

applied that expertise in determining that the use of COTS circulators and the

redesign of the [. . .] would not affect the technical maturity of Raytheon’s GaN

HPA [. . .]. 

Problematically, however, the Air Force did not comply with the

solicitation when it evaluated Raytheon’s GaN HPA [. . .]. Pursuant to the

solicitation, the contractors were required to substantiate a TRL 6 assessment for

any CTEs that had changed since the conclusion of the pre-EMD period. 

Raytheon’s CTE 1 was its GaN HPA [. . .], and not just portions of its GaN HPA

[. . .], such as the GaN HPA or [. . .]. Accordingly, Raytheon was required to

substantiate that the changes it made to the design of its GaN HPA [. . .]–using

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COTS circulators and [. . .]–did not affect the TRL of the GaN HPA [. . .].

Raytheon did not do so. Thus, the Air Force’s conclusion that Raytheon

substantiated TRL 6 ratings for each of the CTEs that had changed since the preEMD period was erroneous. The Air Force should have required Raytheon to

substantiate the TRL 6 rating of its changed CTE 1, and its failure to do so caused

its assessment of Raytheon’s CTE 1 to be in violation of the evaluation scheme set

forth in the solicitation. The Air Force’s evaluation of the technical maturity of

Raytheon’s CTE 1 was therefore arbitrary and capricious. See, e.g.,

CRAssociates, Inc. v. United States, 102 Fed. Cl. 698, 713 (2011) (noting that a

procuring agency’s departure from the evaluation scheme set forth in a solicitation

can “lead to the award . . . being set aside as arbitrary, capricious or otherwise

contrary to law”). Consequently, the GAO attorney’s findings on this issue were

rational, and the Air Force’s reliance on her findings in deciding to take corrective

action was also rational.

Id. at 36-37.

c. Raytheon’s Contention

In disagreeing with the court’s ruling, Raytheon focuses on the provisions of the

solicitation concerning the information that offerors were required to provide regarding CTEs

and the criteria by which the Air Force would evaluate changed CTEs. Specifically, Raytheon

contends that there was no language in the solicitation requiring offerors to provide

substantiation of TRL 6 for changed CTEs that postdated the changes made to the CTEs–in other

words, new substantiation. Therefore, Raytheon argues, it was permitted to submit substantiation

with its proposal that was based on assessments made during the pre-EMD period and predated

the changes it made to its CTE 1. Raytheon further argues that the Air Force’s technical

evaluators were entitled to rely on such substantiation if they believed that it was adequate to

support the TRL 6 assessment for that CTE. During the earlier proceedings before this court,

Raytheon strenuously argued that the Air Force’s technical evaluation of its CTE 1 should be

afforded great deference. However, Raytheon did not specifically argue, as it does now, that

under the relevant language of the solicitation, it was not required to provide substantiation of

changed CTEs that postdated the changes to those CTEs. The court therefore did not address that

argument in its decision denying Raytheon’s bid protest. Nevertheless, in furtherance of the full

and fair administration of justice, the court will describe Raytheon’s newly advanced contention.

In its May 11, 2015 Opinion and Order, the court, without the benefit of Raytheon’s

present argument, interpreted the solicitation to require offerors to substantiate TRL 6

assessments for changed CTEs using evidence that postdated the changes. Pursuant to section L

of the solicitation, offerors were to provide, for each changed CTE, “the current TRL, the source

of the rating, and full substantiation with supporting data.” And, pursuant to section M of the

solicitation, the Air Force was required to determine whether offerors substantiated a TRL 6

assessment for all changed CTEs. A fair reading of these provisions is that the Air Force was

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concerned that an offeror might redesign a CTE to lower its costs (and, hence, its proposed price)

without regard for whether the CTE’s technical maturity would be adversely affected. Thus, to

mitigate that risk, the Air Force wanted evidence that the offeror assessed the TRL of the CTE

after it redesigned the CTE to ensure that the CTE’s TRL was not adversely affected by the

design change. 

However, as Raytheon notes in its RCFC 62(c) motion, the relevant solicitation

provisions do not expressly limit what evidence an offeror could provide to substantiate a TRL 6

assessment of a changed CTE. Accordingly, Raytheon asserts, offerors could provide evidence

that either predated or postdated the change to the CTE,2 and it was the Air Force’s responsibility

to determine whether that evidence was sufficient. Raytheon’s interpretation of the solicitation is

not unreasonable. Nevertheless, the Air Force ultimately concluded that the language of the

solicitation it drafted required a different result. Hence, it determined that corrective action was

appropriate. 

In sum, there exist two fair readings of the relevant solicitation provisions–the one acted

upon by the Air Force, the agency that drafted the solicitation, and the one newly advanced by

Raytheon in its RCFC 62(c) motion. Given that the court was not asked to evaluate Raytheon’s

present contentions when ruling on the parties’ cross-motions for judgment on the administrative

record, the determination of which interpretation of the relevant solicitation provisions is correct

will necessarily be for the Federal Circuit to decide in the first instance. As such, the court

cannot conclude that Raytheon has made a strong showing of a likelihood of success on the

merits or even a substantial case on the merits on this aspect of its appeal. See Hilton, 481 U.S.

at 776; Standard Havens Prods., 897 F.2d at 512; Alaska Cent. Express, 51 Fed. Cl. at 229; see

also Nken v. Holder, 556 U.S. 418, 434 (2009) (noting that to make the required showing, “[i]t is

not enough that the chance of success on the merits be better than negligible” and that “[m]ore

than a mere possibility of relief is required” (internal quotation marks omitted)). As discussed

2

 In its reply in support of its RCFC 62(c) motion, Raytheon contends that “[t]he CTE’s

post-change TRL must be substantiated, but there is no reason that the substantiation must

involve more testing or data when a modification is so innocuous as not to affect the CTE’s

technology maturity.” Reply 6. It then remarks that “[h]ypothetically, if the design change

involved no more than a different color for the CTE’s housing, surely the CTE need not be

retested in order to prove that the TRL rating is unaffected” and that “there is obviously a

continuum of design changes with regard to their relative impact on the CTE’s technology

maturity.” Id. Raytheon’s hypothetical scenario is unavailing. While the court agrees with

Raytheon’s proposition that there is a continuum of design changes–on one end of the continuum

are the design changes that are so significant that they most assuredly would affect technical

maturity, and at the other end of the continuum are the design changes that are so minor that they

most assuredly would not affect technical maturity–the solicitation makes no such distinction. 

Rather, offerors were to identify any CTE that had changed since the pre-EMD period and

substantiate a TRL 6 assessment for those changed CTEs. 

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below, the court reaches the same conclusion with respect to Raytheon’s contentions regarding

the cost/price discussions.

2. The Cost/Price Discussions

a. Factual Background

As noted above, in the solicitation for the current phase of the 3DELRR procurement, the

Air Force described the proposal requirements and its evaluation criteria. Slip op. 5-7. In section

L of the solicitation, the Air Force indicated that offerors were to identify and support their

proposed cost reductions in the cost/price volumes of their proposals. Id. at 6. Then, in section

M of the solicitation, the Air Force described its criteria for evaluating proposed costs and prices. 

Id. at 7. The Air Force’s evaluation was to include an assessment of whether the offerors’

cost/price proposals were reasonable and realistic. Id. 

Raytheon, Lockheed, and Northrop proposed vastly different approaches to reducing the

costs of contract performance. In its proposal, Raytheon identified [. . .] in cost reductions that

included [. . .] for independent research and development (“IR&D”). Id. at 8. In contrast,

Lockheed proposed [. . .]. Id. And, Northrop identified [. . .] cost reductions totaling [. . .], but

did not include a reduction for IR&D. Id. After accounting for their cost reductions, Raytheon

offered the lowest total price [. . .]; Northrop offered [. . .]; and Lockheed offered [. . .]. Id. at 9.

During discussions, the Air Force sent similar ENs to Raytheon and Northrop regarding

the reasonableness and realism of their proposed cost reductions. Id. at 10. Both ENs provided:

In accordance with (IAW) [Federal Acquisition Regulation (“FAR”)] 31.205-18

and [10 U.S.C. § 2320], 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. Any such costs should be considered as direct

charges to the 3DELRR contract. Further, unless properly segregated and agreed

to as unallowable costs IAW FAR Part 31, any such costs may be deemed

unrealistic.

Id. In its response to this EN, Raytheon challenged the Air Force’s interpretation of the rules

regarding the allowability of IR&D costs, noting that the United States Court of Appeals for the

Federal Circuit (“Federal Circuit”) had held in ATK Thiokol, Inc. v. United States, 598 F.3d

1329 (Fed. Cir. 2010), that research and development costs were allowable as IR&D costs unless

specifically required by the contract. Slip op. 11. In contrast, Northrop did not raise any

objections to the Air Force’s statements regarding the allowability of IR&D costs. Id. Moreover,

in response to another EN in which the Air Force requested information, such as “[. . .]/IR&D

planning statements,” to substantiate how Northrop planned to fund contract performance during

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three specified fiscal years, Northrop explained that “[t]he execution of this contract does not

require [. . .]/IR&D funding . . . .” Id. at 9.

As later explained at the GAO hearing, upon reviewing Raytheon’s EN response and

consulting with the Defense Contract Management Agency, the Air Force changed its position

with respect to the allowability of IR&D costs; it determined that Raytheon’s position was

correct. Id. at 12, 17-18. Accordingly, in the follow-up EN that it sent to Raytheon, the Air

Force did not address Raytheon’s statements regarding IR&D costs, id. at 12, suggesting that it

accepted Raytheon’s position. However, in the follow-up EN that it sent to Northrop, the Air

Force did not advise Northrop that it had changed its position regarding the allowability of IR&D

costs and that its earlier statement was therefore incorrect. Id. Further, although the Air Force

did not send an EN regarding the allowability of IR&D costs to Lockheed, it [. . .] during

discussions. Id. at 13.

In its final proposal revision, Raytheon reduced its total proposed price to [. . .], which

reflected an IR&D cost reduction of [. . .]. Id. Northrop proposed a price of [. . .] in its final

proposal revision, an amount that [. . .]. Id. Lockheed, in its final proposal revision, [. . .] its

total proposed price to [. . .], which reflected [. . .]. Id. 

In its protest before the GAO, Northrop contended that the Air Force’s cost/price

discussions were misleading because the Air Force accepted Raytheon’s understanding of the

allowability of IR&D costs, but never advised Northrop of its changed understanding, preventing

it from proposing IR&D cost reductions in line with the IR&D cost reductions proposed by

Raytheon [. . .]. Id. at 16. Specifically, it contended:

If Northrop Grumman had known of the Air Force’s changed

interpretation, it would have responded by protesting the interpretation’s illegality

and/or submitting a radically changed proposal. Northrop Grumman is a very

large corporation with billions in assets and revenue. [. . .] Had Northrop

Grumman known of the Air Force’s expansive view of IR&D, which permitted

offerors to propose IR&D that violated the FAR and the Air Force instruction

provided to Northrop Grumman, Northrop Grumman could have proposed the

types and quantities of IR&D [. . .].

Id. Upon considering all of the evidence, the GAO attorney advised the parties during the

outcome prediction conference that she intended to sustain Northrop’s protest on this issue. Id.

at 19-20. She stated that the record reflected that the Air Force changed its understanding

regarding the allowability of future IR&D costs, but never advised Northrop of its changed

understanding. Id. at 20. She therefore opined that the Air Force’s discussions with Northrop

were misleading and unequal. Id. The Air Force decided to take corrective action based on the

GAO attorney’s determinations. Id. 

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b. The Court’s Ruling

Based on the evidence in the administrative record, the court concluded that the Air

Force’s discussions with Northrop regarding the allowability of IR&D costs were misleading and

unequal. Specifically, it explained:

Raytheon contends that discussions regarding the allowability of IR&D

costs were neither misleading nor unequal, and there is support in the

administrative record for its position. During the first round of discussions,

Northrop unambiguously disclaimed any reliance on IR&D cost reductions in

response to one EN, and at the same time raised no objections to the Air Force’s

statements regarding the allowability of IR&D costs in response to a separate EN. 

As a result, when the Air Force decided not to pursue further discussions with

Northrop regarding IR&D costs, there is a nonfrivolous argument to be made that

the Air Force was merely tailoring its discussions to Northrop’s proposal pursuant

to FAR 15.306(d)(1).

Nevertheless, the evidence in the administrative record weighs more

heavily in favor of Northrop’s contention that the discussions were misleading and

unequal. After the Air Force received the contractors’ responses to the initial set

of ENs, it determined that a statement it had communicated to Raytheon and

Northrop regarding the allowability of IR&D costs no longer accurately

represented its position. By not lodging any further objections to Raytheon’s [. . .]

proposed IR&D cost reductions, the Air Force signaled [. . .] that it was

permissible to propose such reductions. However, the Air Force never advised

Northrop of its changed understanding of the allowability of IR&D costs. 

Through its silence, the Air Force misled Northrop into believing that it would not

accept IR&D cost reductions. Moreover, by advising only Raytheon [. . .] that it

would accept IR&D cost reductions notwithstanding the language of its ENs, the

Air Force engaged in unequal discussions with the contractors. At bottom, it was

the Air Force’s duty to ensure that all three contractors were competing on a level

playing field. See, e.g., Joseph L. DeClerk & Assocs., Inc. v. United States, 26

Cl. Ct. 35, 46 (1992), cited in [Sys. Application & Techs., Inc. v. United States,

691 F.3d 1374, 1383 (Fed. Cir. 2012)]; see also FAR 1.102-2(c)(3) (requiring

procuring agencies to treat all prospective contractors “fairly and impartially”). 

By misleading Northrop regarding its position on the allowability of IR&D costs

and advising only Raytheon [. . .] that it had changed its position, the Air Force

violated that duty. Consequently, the GAO attorney’s conclusion that the Air

Force engaged in misleading and unequal discussions concerning the allowability

of IR&D costs was rational, and the Air Force’s reliance on her conclusion in

deciding to take corrective action was also rational.

Id. at 41.

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c. Raytheon’s Contentions

Raytheon contends that the court’s conclusion that the Air Force acted rationally when

deciding to take corrective action with respect to the misleading and unequal cost/price

discussions is incorrect on two grounds. As an initial matter, Raytheon reiterates an argument

that it first advanced during the merits proceedings: the substantially similar ENs that the Air

Force sent to Raytheon and Northrop contained a misstatement of law regarding the allowability

of IR&D costs, and the Air Force’s failure to correct its misstatement cannot constitute

misleading or unequal discussions. In its May 11, 2015 Opinion and Order, the court rejected

this argument, concluding that the FAR’s requirement of a fair and level playing field during all

aspects of a procurement superseded the decisional law cited by Raytheon in which the courts

ruled that misrepresentations of law cannot, absent unusual circumstances, form the basis for

rescinding or reforming a contract between the federal government and a private party.

3

Raytheon now contends that the applicability of the misstatement-of-law precedent to discussions

conducted during a procurement is an issue of first impression that should be considered, de

novo, by the Federal Circuit on appeal.

Specifically, Raytheon contends that there is a substantial likelihood that it will succeed

on the merits on appeal because (1) there is no distinction between a misstatement of law made

by the government during the discussions phase of a procurement and a misstatement of law

discovered by a contracting party after the execution of the contract; (2) a misstatement of law is

analogous to a patent ambiguity and must be challenged prior to contract award; and (3) the court

erroneously focused on the Air Force’s actions and disregarded Northrop’s knowledge of the law. 

The court is not persuaded by Raytheon’s contentions.

There is no question that the misstatement-of-law principle applies to contracts awarded

via a competitive procurement. Indeed, had the Air Force advised all of the offerors that it

intended to interpret the law concerning the allowability of IR&D costs in one manner, but then,

upon determining that it was mistaken, did not advise any of the offerors of its changed

interpretation, the offeror awarded the contract would likely be unsuccessful in requesting

contract reformation or rescission to remedy the legal misstatement. Notably, however, in those

circumstances, the Air Force would have treated the offerors equally by not advising any of them

of its changed position. In contrast, under the circumstances that actually exist in this case, the

Air Force did not treat all of the offerors equally; once it determined that its interpretation of the

3

 In the decisions relied upon by Raytheon, the party alleging a misstatement of law was

either the party in contractual privity with the federal government or the legal representative of

the party in contractual privity. See generally Mills v. United States, 410 F.2d 1255 (Ct. Cl.

1969); Edwards v. United States, 19 Cl. Ct. 663 (1990); C & L Constr. Co. v. United States, 6 Cl.

Ct. 791 (1984). In contrast, although Raytheon is in contractual privity with the Air Force, it is

not seeking the rescission or reformation of their contract. Rather, Raytheon is challenging the

ability of another offeror to seek the rescission of Raytheon’s contract with the Air Force.

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law was mistaken, it suggested to some, but not all, of the offerors that its position had changed. 

Therefore, regardless of what Northrop knew or did not know about the law concerning the

allowability of IR&D costs, it did not know how the Air Force actually planned to treat IR&D

costs–information that the Air Force provided to Raytheon [. . .]. With the benefit of the GAO

attorney’s outcome prediction statement, the Air Force recognized that it had supplied the

offerors with different information regarding the allowability of IR&D costs and appropriately

decided to take corrective action to remedy the information disparity.

The second basis for Raytheon’s challenge to the court’s conclusion that the Air Force

acted rationally in deciding to take corrective action is that the court erred in concluding that

Northrop had established prejudice before the GAO. As with its previous contention, Raytheon

first made this argument during the merits proceedings. The court rejected Raytheon’s

arguments in its May 11, 2015 Opinion and Order, noting that the evidence in the record before

the GAO–that (1) all three contractors submitted technically acceptable proposals; (2) the

difference between Northrop’s final proposed price of [. . .] and Raytheon’s final proposed price

of [. . .] was [. . .]; (3) Raytheon proposed IR&D cost reductions of [. . .]; and (4) Northrop is a

large government contractor with extensive financial resources–was sufficient to support the

implicit conclusion of the GAO attorney that Northrop possessed the financial means to propose

IR&D cost reductions [. . .], making it possible for Northrop to overcome the differential in

proposed prices. 

Raytheon has not persuaded the court that its original ruling regarding prejudice was

incorrect. As noted by the court in its May 11, 2015 Opinion and Order, a protestor can prevail

on a claim only if it demonstrates that it was prejudiced by a significant error in the procurement

process. Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996). To establish

prejudice, a protestor need not prove that it would have won the contract but for the alleged error

in the procurement. Bannum, Inc. v. United States, 404 F.3d 1346, 1358 (Fed. Cir. 2005). 

Rather, a protestor “must show that there was a ‘substantial chance’ it would have received the

contract award absent the alleged error.” Banknote Corp. of Am. v. United States, 365 F.3d

1345, 1350 (Fed. Cir. 2004) (quoting Emery Worldwide Airlines, Inc. v. United States, 264 F.3d

1071, 1086 (Fed. Cir. 2001)). The evidence in the record before the GAO is sufficient to meet

this standard. Contrary to Raytheon’s assertion, Northrop was not required to provide the GAO

with specific examples of IR&D cost reductions it could propose to demonstrate a substantial

chance of being awarded the contract had the Air Force not conducted unequal and misleading

discussions; it was enough that Northrop demonstrated its capacity to propose such cost

reductions. 

Moreover, in arguing that Northrop did not adequately establish prejudice before the

GAO, Raytheon imposes requirements on the GAO that have no basis in the law. The Air

Force’s decision to take corrective action was based on a GAO attorney’s outcome prediction

statement, not a formal GAO decision. There is no statutory or regulatory requirement that such

a statement address every finding that would be required in a written decision from the GAO. 

Indeed, it would defeat the purpose of outcome prediction–the prompt resolution of protests, see

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4 C.F.R. § 21.10(e) (2014)–if the assigned GAO attorney was required to address every element

of a protestor’s claim during the outcome prediction conference. Thus, Raytheon’s attempt to

impute such a requirement on the GAO attorney in this case is untenable. 

In short, Raytheon has not established a likelihood of success on the merits, or even a

substantial case on the merits, with respect to the Air Force’s decision to take corrective action to

remedy its misleading and unequal cost/price discussions.

B. The Equitable Factors

Raytheon has not demonstrated either a likelihood of success or a substantial case on the

merits of its appeal. However, assuming, strictly for the for the sake of argument, that Raytheon

had established at least a substantial case on the merits, it would not be entitled to relief under

RCFC 62(c) because, as explained below, Raytheon has not demonstrated that the equitable

factors weigh in its favor. 

1. Irreparable Injury

“When assessing irreparable injury, ‘[t]he relevant inquiry in weighing this factor is

whether plaintiff has an adequate remedy in the absence of an injunction.’” Overstreet Elec. Co.

v. United States, 47 Fed. Cl. 728, 743 (2000) (quoting Magellan Corp. v. United States, 27 Fed.

Cl. 446, 447 (1993)); see also Younger v. Harris, 401 U.S. 37, 43-44 (1971) (noting that “the

basic doctrine of equity jurisprudence [is] that courts of equity should not act . . . when the

moving party has an adequate remedy at law and will not suffer irreparable injury if denied

equitable relief”). Raytheon first contends that it would be irreparably injured if the Air Force

was permitted to take corrective action because it would be “forced to expend the time, effort,

and expense to recompete with itself as well as with Lockheed and Northrop for the contract that

[it] already lawfully won, and to demonstrate the maturity of technology” that has already been

found to be technically mature. Mot. 16. In both of the decisions relied upon by Raytheon in

support of this contention, the court determined that the corrective action proposed by the

government was unlawful; in other words, the protestors–the original contract awardees–

succeeded on the merits of their claims. See Sys. Application & Techs., Inc. v. United States,

100 Fed. Cl. 687, 719 (2011), aff’d, 691 F.3d at 1374; Sheridan Corp. v. United States, 95 Fed.

Cl. 141, 154 (2010). As a result, the court in each case concluded that the protestors would be

irreparably injured by having to unnecessarily recompete for contracts that, as confirmed by the

court, they had already lawfully won. Sys. Application & Techs., 100 Fed. Cl. at 720-21;

Sheridan Corp., 95 Fed. Cl. at 155.

Raytheon, however, is not in the same position as the protestors in Systems Application

& Technologies and Sheridan Corp. In its May 11, 2015 Opinion and Order, the court concluded

that the Air Force’s decision to take corrective action was a rational response to errors in the

procurement. In other words, the court concluded that Raytheon could not be considered the

lawful awardee of the EMD contract. If the contract was not properly awarded to Raytheon in

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the first instance, Raytheon being required to compete for the contract anew does not constitute

an irreparable injury. Moreover, Raytheon has not established that it is likely to succeed, or has a

substantial case, on the merits of its appeal before the Federal Circuit. As a result, the court

cannot characterize the recompetition as unnecessary and, consequently, it cannot characterize

Raytheon’s participation in the recompetition as an irreparable injury. See also Nken, 556 U.S.

at 434-35 (noting that the possibility of irreparable injury is insufficient to satisfy the factor).

Raytheon also contends that if the Air Force quickly takes corrective action and awards a

new EMD contract before the Federal Circuit rules on its appeal, it would be left without a

remedy. This contention is not compelling. If, after corrective action, the Air Force awarded

Raytheon the EMD contract for a second time, Raytheon would still have a claim for bid

preparation and proposal costs incurred during the purportedly unnecessary recompetition. See

28 U.S.C. § 1491(b)(2) (2012). And, an award of the EMD contract to Lockheed or Northrop

after corrective action would not moot Raytheon’s claim that the decision to take corrective

action was irrational; if the Air Force chose to proceed with contract performance with the new

awardee, it would be doing so at the risk of having its decision to take corrective action

overturned and the newly awarded contract invalidated.

Finally, Raytheon contends that it would be irreparably injured if it prevails on appeal

after being forced to recompete for the EMD contract because it would have expended additional

resources to win a contract that it had already won. Such an injury is not irreparable; Raytheon

conceivably could amend its complaint or file a new complaint, as appropriate, to recover bid

preparation and proposal costs for any costs it incurred during its participation in a new

competition later deemed to be improper. See id. 

In sum, Raytheon has not established that it would be irreparably injured if it was denied

relief under RCFC 62(c). Although this finding would be sufficient to end its inquiry on the

equitable factors, the court will address the other factors for the sake of completeness.

2. Harm to the Other Interested Parties

Under the next equitable factor, Raytheon argues that the harm it would suffer in the

absence of relief under RCFC 62(c) outweighs the harm to the Air Force if the court prevented

the Air Force from taking corrective action and reawarding the EMD contract.4 In advancing this

argument, Raytheon does not identify any way in which the Air Force might be injured if the

court granted its RCFC 62(c) motion. Rather, Raytheon contends that the Air Force would be

injured if the court denied Raytheon’s motion and permitted the Air Force to take corrective

4

 Raytheon does not address the harm that might be suffered by the other interested

parties–Lockheed and Northrop. A discussion of the harms that those contractors might suffer if

the court prevented the Air Force from taking corrective action and reawarding the EMD contract

is not necessary for the resolution of Raytheon’s RCFC 62(c) motion. 

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action and reaward the EMD contract. In those circumstances, Raytheon asserts, the Air Force

would be expending resources for an unnecessary recompetition.

In its response to Raytheon’s RCFC 62(c) motion, defendant, unsurprisingly, describes

how the Air Force would be harmed if it was not permitted to proceed with corrective action. It

generally contends that if the court granted Raytheon’s motion, the Air Force’s mission would be

adversely affected and the Air Force would incur additional costs to sustain the existing radar

system. Specifically, it contends that (1) the existing radar system “[. . .], limiting the system’s

ability to distinguish between our aircraft and an adversary aircraft” and rendering the 3DELRR

system critical to national defense; (2) the existing radar system “is reaching the end of its service

life and is becoming more difficult and costly to maintain”; (3) because each existing radar

system is operational only [. . .], the Air Force must [. . .] existing radar systems “[. . .] to ensure

that near-continuous air surveillance can be maintained to support ongoing operations”; and (4)

there are “diminishing manufacturing sources for spare parts and material shortages,” leading to

increased maintenance costs for the existing radar system. Def.’s Resp. 17-18 (relying on a

declaration from Steven D. Wert, the Air Force Program Executive Officer for Battle

Management at the Air Force Life Cycle Management Center, Hanscom Air Force Base,

Massachusetts). In sum, defendant asserts that the delay in the 3DELRR procurement that would

result from preventing the Air Force from taking corrective action would be harmful because the

Air Force would be required “to extend the useful life of an increasingly expensive and less

effective radar system.” Id. at 18.

Raytheon disputes defendant’s assertion that the Air Force would be harmed if the court

prevented it from taking corrective action. In particular, Raytheon contends that the Air Force

cannot be very concerned over the prospect of a delay in the 3DELRR procurement because (1) it

did not seek to override the automatic stay of performance put in place when Northrop and

Lockheed lodged their protests at the GAO and (2) it voluntarily stayed taking corrective action

during the pendency of this bid protest.5 However, Raytheon fails to acknowledge that the GAO

is required by statute to resolve bid protests within 100 days, 31 U.S.C. § 3554(a) (2012), and

that a procuring agency typically will agree to maintain the status quo if the United States Court

of Federal Claims agrees to resolve the bid protest in an expeditious manner. In other words, the

delays in those circumstances are known quantities. In contrast, even when the Federal Circuit

agrees to an expedited briefing and argument schedule for an appeal, as it has in this case, it is

not obligated to issue an expedited decision on the appeal. Because the date of the Federal

Circuit’s decision cannot be ascertained, the Air Force would have no way of knowing how long

the 3DELRR procurement might be delayed if the court granted Raytheon’s RCFC 62(c) motion. 

5

 Raytheon advances a number of other arguments regarding the harm that might be

suffered by the Air Force if the court prevented the Air Force from taking corrective action. 

However, those arguments are aimed at the substance of Mr. Wert’s declaration, and not at the

harm alleged by defendant in its response to Raytheon’s RCFC 62(c) motion. Accordingly, the

court declines to address them. 

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The court finds that the Air Force would be harmed by such an indeterminate delay in a critical

procurement.

In fact, contrary to Raytheon’s contention otherwise, the delay of the 3DELRR

procurement could be substantial if the court granted Raytheon’s RCFC 62(c) motion. In a

declaration filed with the Federal Circuit and subsequently filed in this court, the Air Force

represents that it does not anticipate completing its corrective action and reawarding the EMD

contract until early December 2015–approximately six months from now. Thus, if the court

granted Raytheon’s RCFC 62(c) motion but the Federal Circuit denied Raytheon’s appeal, the

delay to the 3DELRR procurement would equal the time that the Federal Circuit took to issue its

decision (briefing and argument will themselves take three months), plus the six months the Air

Force needs to take corrective action. In short, the delay would be at least nine months.

To conclude, given that Raytheon has not established an irreparable injury and that

defendant has demonstrated that a delay could seriously harm the Air Force, the balance of harms

does not weigh in Raytheon’s favor. 

3. Public Interest

In addressing the third equitable factor, Raytheon correctly asserts that “the public has a

strong and overriding interest in maintaining the integrity of the procurement process.” Mot. 17-

18. It argues that the Air Force’s decision to take corrective action and the court’s conclusion

that the Air Force’s decision was rational “will upset a lawful contract, and sanction a subsequent

unfair competition in which Raytheon must compete against itself for a contract it already won,

due to” the Air Force’s disclosure of its price to Lockheed and Northrop during postaward

debriefings. Id. at 18. Raytheon also contends that “the diversion of critical Agency resources to

an unnecessary competition . . . thwarts the public interest.” Id. 

Defendant, in turn, advances three reasons why the public interest supports allowing the

Air Force to proceed with its corrective action. First, it contends that the court has already

examined and upheld the Air Force’s decision to take corrective action, and that there is a public

interest in allowing an agency to conduct a procurement without excessive judicial interference. 

Second, it asserts a national security interest in replacing the existing, aging radar system with a

radar system that is capable of detecting current threats. Third, it argues that the public’s interest

in the integrity of the procurement process is best served by having the Air Force conduct the

3DELRR procurement in accordance with the solicitation and the FAR, which the proposed

corrective action will accomplish.

The court agrees with defendant that the public interest is best served when a

procurement is conducted openly and fairly in accordance with the solicitation and the FAR. 

See, e.g., Bona Fide Conglomerate, Inc. v. United States, 96 Fed. Cl. 233, 242 (2010); PGBA,

LLC v. United States, 57 Fed. Cl. 655, 663 (2003); Overstreet Elec., 47 Fed. Cl. at 744. In this

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case, the Air Force determined that corrective action was necessary to comply with the

solicitation and the FAR, and the court concluded that the Air Force’s determination was 

rational. Consequently, the public’s interest in an open and fair competition is aligned with the

status quo. Raytheon has therefore not established that the public interest weighs in its favor.

C. Weighing the Four Factors

In sum, Raytheon has not demonstrated either a likelihood of success or a substantial case

on the merits of its appeal. Nor has Raytheon established that the remaining equitable

factors–irreparable injury, injury to the other interested parties, and the public interest–weigh in

its favor. Accordingly, Raytheon is not entitled to relief under RCFC 62(c).

III. CONCLUSION

For the reasons set forth above, the court DENIES Raytheon’s motion for a stay of the

court’s judgment and to enjoin the Air Force from proceeding with its proposed corrective action

or awarding a new contract pending appeal.

The court has filed this ruling under seal. The parties shall confer to determine agreed-to

proposed redactions. Then, by no later than Wednesday, June 17, 2015, the parties shall file a

joint status report indicating their agreement with the proposed redactions, attaching a copy of

those pages of the court’s ruling containing proposed redactions, with all proposed

redactions clearly indicated.

Also, the parties have not yet filed redacted versions of all of the documents that they

filed under seal.6 Paragraph 12 of the February 12, 2015 amended protective order contemplates

that the parties will complete the redaction process promptly. Accordingly, the parties shall be in

full compliance with the redaction requirement as soon as possible, but by no later than

Friday, July 10, 2015. 

IT IS SO ORDERED.

s/ Margaret M. Sweeney 

MARGARET M. SWEENEY

Judge

6

 As of the date of this decision, redacted versions of the following sealed documents

have not been filed: docket entries 50, 52, 56, 58, 59, 66, 70, 72, 73, 74, 86, 87, 92, 93, 94, 95,

and 97.

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