# In th e United States Court of Federal Cl aims

No. 15-77C (F iled Under Seal: J une 5, 2015) (Reissued: J une 18, 2015) *

************************************* RAYTHEON COMPANY, *

* Plaintiff, *

*

v. *

* THE UNI TED STATES, *

* Defendant, *

* and *

* L OCKHEED MARTI

N CORPORATI O N * and NORTHROP GRUMMAN SYSTEMS * CORPORATI O N, *

* Defendant-I

ntervenors. *

*************************************

OP INION AND ORDER ON P LAINTIF F ’S RCF C 62(c) MOTION

I n this bid protest, plaintiff Ray theon Company

(“Ray theon”), the contract awardee, challeng es the decision of the United States Air F o rce (“Air F orce”) 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 lodg ed bydefendantintervenors L ockheed Martin Corporation (“L ockheed”) and Northrop Grumman Sy stems Corporation (“Northrop”). I n a May 11, 2015 Opinion and Order, the court denied Ray theon’s motion for judg ment on the administrative record and g r anted the remaining parties’ crossmotions for judg ment on the administrative record, allowing the Air F orce to proceed with its proposed corrective action. Presently before the court is Ray

theon’s motion for a stay

of the court’s judg ment and to enjoin the Air F orce from proceeding with its proposed corrective action or awarding

a new contract pending

appeal. F or the reasons set forth below, the court denies Ray theon’s motion.

* This reissued Opinion and Order incorporates the ag reed-to redactions proposed by the parties on J une 17, 2015. The redactions are indicated with bracketed ellipses (“[ . . .] ”).I. BACK G ROUND

Several y e a

rs ag o, the Air F o rce initiated the Three-Dimensional Ex peditionary

L ong

Rang e Radar (“3DEL

RR”) acquisition prog ram to replace its ex isting AN/TPS-75 radar sy stem. 1 Slip op. 2. During the current phase of the procurement–Eng ineeringand Manufacturing Development (“EMD”)–Ray theon, L ockheed, and Northrop submitted proposals to further develop, build, and test a radar sy stem. I d. at 5. The Air F orce determined that all of the proposals were technically acceptable and ultimately awarded the EMD contract to Ray theon. I d. at 14. I n postaward debriefing s, the Air F orce disclosed the price of the contract it awarded to Ray theon to L ockheed and Northrop. I d. at 15.

B o th L o ckheed and Northrop protested the Air F orce’s award decision at the GAO. I d. After ex tensive proceeding s, id. at 15-18, the GAO attorney assig n ed 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 g rounds: (1) the Air F orce erred in its technical evaluation of Ray theon’s proposal and (2) the Air F orce conducted unequal and misleading discussions reg arding the parties’ cost/price proposals. I d. at 19-20. She therefore recommended that the Air F o rce take corrective action to cure the defects that she identified. I d. at 20. The followingday , the Air F o rce indicated that based on the GAO attorney ’s statements duringthe outcome prediction conference, it would take corrective action to cure the identified defects. I d. As a result, the GAO dismissed the protests lodg ed by L ockheed and Northrop as moot. I d.

Shortly thereafter, on J anuary

26, 2015, Ray

theon filed the current bid protest, arg uing that the Air F orce’s decision to take corrective action was arbitrary , capricious, and unreasonable because the GAO attorney ’s determinations were themselves unreasonable. I d. at 21. The parties fully

briefed cross-motions for judg ment on the administrative record and the court heard argument. I d. 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 F orce’s decision to take corrective action based on those determinations was therefore rational. I d. at 34-44. Consequently , it denied Ray theon’s protest. I d. at 44-45. The clerk entered judg ment on May 13, 2015.

The following day
, Ray

theon filed a notice of appeal. I t also filed a motion seekingto stay the court’s judg ment and enjoin the Air F orce from either proceeding with its proposed corrective action or awarding a new contract pending

appeal. The parties have fully briefed

1 W ith one ex ception, 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.

-2-Ray

theon’s motion pursuant to an ex pedited briefing schedule set by the court. The court deems oral arg ument unnecessary

.

II. DISCUSSION

Ray theon moves to stay the court’s judg ment and enjoin the Air F orce from proceeding with its proposed corrective action pending appeal pursuant to Rule 62(c) of the Rules of the United States Court of F ederal Claims (“RCF C”), which provides: “W hile an appeal is pending from an interlocutory

order or final judgment that g rants, 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 rig hts.” I n entertaininga motion under RCF C 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. B r aunskill, 481 U.S. 770, 776 (1987); Standard Havens Prods., I nc. v. Gencor I

ndus., I nc., 897 F .2d 511, 512 (F ed. Cir. 1990); Alaska Cent. Ex press, Inc. v. United States, 51 F ed. Cl. 227, 229 (2001). The court need not assig n each factor equal weig

ht. 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.” I d. at 513 (quoting Hilton, 481 U.S. at 778). And, when the equitable factors weig h decidedly

in the moving party ’s favor, “‘it will ordinarily be enoug h that the [ moving party ] has raised questions g oing to the merits so serious, substantial, difficult and doubtful, as to make them a fair g r ound for litig ation . . . .’” I d. (quoting Hamilton W a tch Co. v. B enrus W atch Co., 206 F

. 2d 738, 740 (2d Cir. 1953)); accord Alaska Cent. Ex press, 51 F ed. Cl. at 230 (“[ I ] f the equities weig h heavily in favor of maintaining

the status quo, this court may

g rant an injunction under RCF C 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

Ray theon first contends that it is likely to succeed on the merits of its appeal, asserting that the court erred by

upholding the Air F o rce’s decision to take corrective action with respect to both the technical evaluation of Ray theon’s proposal and the cost/price discussions. The court beg ins by addressing the technical evaluation issue.

1. The Technical Evaluation of Raytheon’s P roposal

a. F actual Background

During an earlier phase of the 3DELRR procurement, a team of independent subjectmatter ex perts (“independent review team”) with ex pertise in radar sy stem desig n, hardware,

-3-software, testing
, and sig nal processing prepared a Technolog

y Readiness Assessment report for each offeror’s proposed radar sy stem. Slip op. 2-3. I n those reports, the independent review team identified the radar systems’ critical technology elements (“CTEs”) and assig ned each CTE a Technology

Readiness L evel (“TRL ”). I d. at 2. Ray theon’s CTE 1 was its Gallium Nitride Hig h Power Amplifier [

. . .] (“GaN HPA [ . . .] ”), a [ . . .] its proposed radar sy stem’s [ . . .] subsy stem. I d. at 3-4. However, notwithstanding its initial description of Ray theon’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 technolog ies that required TRL assessment. I d. at 4-5.

I n the solicitation for the current phase of the 3DEL RR procurement, the Air F orce described the proposal requirements and its evaluation criteria. I d. at 5-7. In paragraph 5.3.1.3 of section L

of the solicitation, the Air F orce indicated that offerors were to provide the following information in their technical proposals: “The Offeror shall identify all critical technolog y elements (CTEs) of the desig n solution that have chang ed since [ the pre-EMD phase of the procurement] . . . . F or 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 parag raph 2.4.1.3 of section M of the solicitation, the Air F orce would evaluate whether the technical proposals met the stated requirements “based on,” in part: “Substantiation of at least a Technolog

y Readiness L evel 6 (TRL 6 ) for all Critical Technology Elements (CTEs) of the desig n solution that have chang ed since the Pre-EMD Preliminary Desig n Review (PDR). One CTE must be a Gallium Nitride (GaN) Hig h Power Amplifier (HPA)-based Transmit/Receive (T/R) module.” Slip op. 7.

I n its technical proposal, Ray theon did not describe any sig n ificant chang es to its [ . . .] subsy stem, and ex pressly represented that since the pre-EMD period, it had not introduced any “new technolog ies” to its “desig n solution.” I d. at 7-8. Ray theon further represented that its CTEs had not chang ed and that its radar sy stem prototy pe “successfully

demonstrated all PreEMD phase CTEs at TRL 6 and the overall desig

n maturity

in a relevant environment.” I d. at 8. However, Ray

theon did chang e the desig n of its CTE 1 by [ . . .] . I d. Ray

theon acknowledg ed this chang e during discussions in its response to an Evaluation Notice (“EN”) issued by the Air F orce in which the Air F o rce requested information reg arding Ray theon’s proposed production cost saving s. I d. at 9. Specifically , Ray theon noted:

[ . . .]

I d. The Air F orce reviewed this response and ultimately deemed the discussion issue resolved. I d.

W h en evaluating

the offerors’ final proposal revisions, the Air F orce’s technical evaluators reviewed Ray

theon’s proposal for compliance with the solicitatio n’s technical requirements. I d. at 13. These technical evaluators were advised by four members of the orig inal independent review team. I d . W ith respect to the requirement that the offerors substantiate TRL

-4-6 rating s for each of the CTEs that had chang ed since the pre-EMD period, Kevin Ray , the chief evaluator for the relevant technical subfactor, remarked:

Ray theon substantiated all criteria listed in Section M 2

. 4.1.3.

The Technology

Readiness Assessment (TRA) I ndependent Review Team (I RT) assessed all Ray

theon’s Critical Technolog y Elements (CTEs) at Technolog y

Readiness L evel 6 (TRL 6) during the Pre-Eng ineering and Manufacturing

Development (Pre-EMD) Period of the Technolog y Development (TD) Phase. Ray

theon listed the same CTEs in the EMD proposal as those identified in the Pre-EMD Period. I n addition, Ray

theon identified one CTE as a Gallium Nitride (GaN) Hig h Power Amplifier (HPA)-based Transmit/Receive (T/R) module which met the Government’s requirement.

TRA I RT members reviewed and analy z ed Volume I I , Parag raph 1.3, Pag es I I -86 to I I -88. The I RT members confirmed the CTEs listed were the orig inal CTEs approved by the team in 2013 and there were no chang es to the CTEs since the Pre-EMD Period Preliminary Desig n Review (PDR) where Ray theon was assessed at TRL 6. Ray theon described each CTE in the following Volume I I

pag e s.
1. Pag es I I -19 to I I -21 and the classified Volume I I A , F ig ure I I A-1.0.1-6 Sy stem Architecture for the T/R L ine Replaceable Unit (L RU) and the receive LRU.

I d. at 13-14.

I n its protest before the GAO, L ockheed challeng ed the Air F orce’s technical evaluation of Ray theon’s CTE 1, arg

uing that because Ray

theon’s proposed GaN HPA [ . . .] was different from the GaN HPA [ . . .] it demonstrated during the pre-EMD period, the Air F orce improperly considered Ray

theon’s CTE 1 to be assessed at TRL 6. I d. at 16. During a hearing convened by the GAO, Mr. Ray

testified that the Air F orce (1) considered the GaN HPA and [ . . .] as the new and novel critical technolog ies that required TRL assessment; (2) did not consider the circulator to be a critical technolog

y ; (3) determined that although [ . . .] the circulator [ . . .] would require [ . . .] to be redesig n ed, neither of the critical technolog ies in CTE 1 (the GaN HPA and [ . . .] ) were affected by

the desig n chang e; (4) did not believe that [ . . .] the circulator would impact performance; and (5) did not request, and Ray theon did not provide, any information reg arding the proposed redesig

ned [ . . .] , such as the new desig n or test data. I d. at 17. Upon considering all of the evidence, the GAO attorney advised the parties during the outcome prediction conference that she intended to sustain L ockheed’s protest on this issue. I d

. at 19-20. She stated that the record reflected that Ray theon’s CTE 1 was the [ . . .] GaN HPA [ . . .]
, not just the GaN HPA and [ . . .] , and that Ray theon’s [ . . .] , as redesigned with the circulator [ . . .] , was never tested. I d . at 19. According ly , she opined that the Air F orce erred in concluding that Ray theon’s

-5-CTE 1 was at TRL 6. I d. at 20. The Air F orce decided to take corrective action based on the

GAO attorney ’ s determinations. I d.

b. The Court’s Ruling

B a sed on the evidence in the administrative record, the court concluded that the Air F orce did not comply with the evaluation scheme set forth in the solicitation. Specifically , it ex plained:

B ased on the contemporaneous evidence contained in the administrative record, it is readily apparent that despite the various labels used to denote Ray theon’s CTE 1, the independent review team and the Air F orce’s technical evaluators focused their evaluation of the maturity of Ray theon’s CTE 1 on the new and novel aspects of the GaN HPA [ . . .]

– the GaN HPA and [ . . .] . I ndeed, neither the members of the independent review team nor the Air F o rce’s technical evaluators–the individuals with the relevant knowledg e and ex pertise–ex pressed any concern that the introduction of COTS circulators or the [ . . .] would affect the TRL of Ray

theon’s CTE 1.

Normally , a procuring

ag e ncy ’s technical assessments, such as the ones made by the Air F orce with respect to Ray theon’s CTE 1, must be afforded the g reatest possible deference. E.W . B liss Co. v. United States, 77 F .3d 445, 449 (F ed. Cir. 1996); B eta Analy tics I nt’l, I nc. v. United States, 67 F ed. Cl. 384, 395 (2005) (“The evaluation of proposals for their technical excellence or quality is a process that often involves the special ex pertise of procurement officials, and thus reviewing courts g ive the g reatest deference possible to these determinations.”). . . . I n lig ht of the hig hly

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 F orce’s technical evaluators reasonably

assessed that the design chang e proposed by Ray theon would not affect the TRL

of Ray theon’s CTE 1. The members of the independent review team in particular possessed ex p ertise in radar sy stem desig n, hardware, software, testing , and sig n al processing , and it is eminently reasonable to conclude that they applied that ex p ertise in determiningthat the use of COTS circulators and the redesig n of the [ . . .] would not affect the technical maturity of Ray theon’s GaN HPA [

. . .]

. Problematically , however, the Air F orce did not comply with the solicitation when it evaluated Ray theon’s GaN HPA [ . . .] . Pursuant to the solicitation, the contractors were required to substantiate a TRL 6 assessment for any CTEs that had chang ed since the conclusion of the pre-EMD period. Ray theon’s CTE 1 was its GaN HPA [ . . .] , and not just portions of its GaN HPA [ . . .] , such as the GaN HPA or [ . . .] . According ly , Ray theon was required to substantiate that the chang es it made to the desig n of its GaN HPA [ . . .]

– u sing

-6-COTS circulators and [ . . .] –did not affect the TRL o f the GaN HPA [ . . .]

. Ray theon did not do so. Thus, the Air F orce’s conclusion that Ray theon substantiated TRL 6 rating s for each of the CTEs that had chang ed since the preEMD period was erroneous. The Air F orce should have required Ray theon to substantiate the TRL

6 rating of its chang ed CTE 1, and its failure to do so caused its assessment of Ray

theon’s CTE 1 to be in violation of the evaluation scheme set forth in the solicitation. The Air F orce’s evaluation of the technical maturity of Ray theon’s CTE 1 was therefore arbitrary and capricious. See, e.g
., CRAssociates, I nc. v. United States, 102 F ed. Cl. 698, 713 (2011) (noting that a procuringag ency ’ 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 finding s on this issue were rational, and the Air F o rce’s reliance on her finding s in deciding to take corrective action was also rational.

I d. at 36-37.

c. Raytheon’s Contention

I n disag reeing

with the court’s ruling , Ray theon focuses on the provisions of the solicitation concerningthe information that offerors were required to provide reg a rding CTEs and the criteria by

which the Air F orce would evaluate chang e d CTEs. Specifically , Ray theon contends that there was no lang uag e in the solicitation requiring offerors to provide substantiation of TRL 6 for chang ed CTEs that postdated the chang es made to the CTEs–in other words, new substantiation. Therefore, Ray theon argues, it was permitted to submit substantiation with its proposal that was based on assessments made during the pre-EMD period and predated the chang es it made to its CTE 1. Ray theon further arg

ues that the Air F orce’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 proceeding s before this court, Ray theon strenuously

argued that the Air F o r ce’s technical evaluation of its CTE 1 should be afforded g

reat deference. However, Ray theon did not specifically argu e, as it does now, that under the relevant lang

uag e of the solicitation, it was not required to provide substantiation of chang ed CTEs that postdated the chang es to those CTEs. The court therefore did not address that argument in its decision deny ing Ray theon’s bid protest. Nevertheless, in furtherance of the full and fair administration of justice, the court will describe Ray theon’s newly

advanced contention.

I n its May

11, 2015 Opinion and Order, the court, without the benefit of Ray theon’s present arg

ument, interpreted the solicitation to require offerors to substantiate TRL 6 assessments for chang ed CTEs using evidence that postdated the chang es. Pursuant to section L of the solicitation, offerors were to provide, for each chang ed 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 F orce was required to determine whether offerors substantiated a TRL 6 assessment for all chang ed CTEs. A fair reading of these provisions is that the Air F orce was

-7-concerned that an offeror mig h t redesig n a CTE to lower its costs (and, hence, its proposed price) without reg ard for whether the CTE’s technical maturity would be adversely

affected. Thus, to mitig ate that risk, the Air F orce wanted evidence that the offeror assessed the TRL of the CTE after it redesig

ned the CTE to ensure that the CTE’s TRL was not adversely

affected by

the desig n chang e.
However, as Ray

theon notes in its RCF C 62(c) motion, the relevant solicitation provisions do not ex pressly limit what evidence an offeror could provide to substantiate a TRL 6 assessment of a chang ed CTE. According ly , Ray theon asserts, offerors could provide evidence that either predated or postdated the chang e to the CTE, 2 and it was the Air F orce’s responsibility to determine whether that evidence was sufficient. Ray theon’s interpretation of the solicitation is not unreasonable. Nevertheless, the Air F o rce ultimately concluded that the lang

u ag e of the solicitation it drafted required a different result. Hence, it determined that corrective action was appropriate.

I n sum, there ex ist two fair reading s of the relevant solicitation provisions–the one acted upon by the Air F orce, the ag ency that drafted the solicitation, and the one newly advanced by Ray theon in its RCF C 62(c) motion. Given that the court was not asked to evaluate Ray theon’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 F ederal Circuit to decide in the first instance. As such, the court cannot conclude that Ray theon 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. Ex press, 51 F ed. 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 enoug h that the chance of success on the merits be better than neg lig ible” and that “[ m] ore than a mere possibility

of relief is required” (internal quotation marks omitted)). As discussed

2 I n its reply

in support of its RCF C 62(c) motion, Ray theon contends that “[ t] he CTE’s post-chang e 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 technolog y

maturity .” Reply

6. I t then remarks that “[ h] y p othetically , if the desig n chang e 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 desig n chang es with reg ard to their relative impact on the CTE’s technolog y maturity .” I d. Ray

theon’s hy

pothetical scenario is unavailing . W hile the court agrees with Ray theon’s proposition that there is a continuum of design chang es–on one end of the continuum are the design

chang es that are so sig nificant that they most assuredly would affect technical maturity , and at the other end of the continuum are the desig n chang es 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 chang ed since the pre-EMD period and substantiate a TRL 6 assessment for those chang ed CTEs.

-8-below, the court reaches the same conclusion with respect to Ray theon’s contentions reg arding the cost/price discussions.

2. The Cost/P rice Discussions

a. F actual Background

As noted above, in the solicitation for the current phase of the 3DEL RR procurement, the Air F orce described the proposal requirements and its evaluation criteria. Slip op. 5-7. I n section Lof the solicitation, the Air F o rce indicated that offerors were to identify and support their proposed cost reductions in the cost/price volumes of their proposals. I d. at 6. Then, in section M of the solicitation, the Air F orce described its criteria for evaluating proposed costs and prices. I d. at 7. The Air F o rce’s evaluation was to include an assessment of whether the offerors’ cost/price proposals were reasonable and realistic. I d.

Ray theon, L ockheed, and Northrop proposed vastly different approaches to reducing the costs of contract performance. I n its proposal, Ray

theon identified [ . . .] in cost reductions that included [ . . .] for independent research and development (“I R& D”). I d . at 8. I n contrast, L ockheed proposed [ . . .] . I d. And, Northrop identified [ . . .] cost reductions totaling [ . . .] , but did not include a reduction for IR& D. I d. After accounting for their cost reductions, Ray theon offered the lowest total price [ . . .] ; Northrop offered [ . . .] ; and L ockheed offered [ . . .] . I d. at 9.

During discussions, the Air F orce sent similar ENs to Ray theon and Northrop reg arding the reasonableness and realism of their proposed cost reductions. I d. at 10. B oth ENs provided:

I n accordance with (I

AW ) [ F ederal Acquisition Reg ulation (“F A R”)] 31.205-18 and [ 1 0 U.S.C. § 2320] , any cost claimed or considered to be I R& D or a capital investment shall not be allowable as indirect charg es for work implicitly required for performance (necessary to perform the contract) or ex p licitly required to be done by the terms of the contract. Any such costs should be considered as direct charg es to the 3DEL RR contract. F urther, unless properly seg reg ated and agreed to as unallowable costs IAW F AR Part 31, any such costs may

be deemed unrealistic.

I d. I n its response to this EN, Ray theon challeng ed the Air F orce’s interpretation of the rules reg arding the allowability of I R& D costs, noting that the United States Court of Appeals for the F ederal Circuit (“F e d eral Circuit”) had held in ATK Thiokol, I nc. v. United States, 598 F .3d 1329 (F ed. Cir. 2010), that research and development costs were allowable as I R& D costs unless specifically

required by

the contract. Slip op. 11. In contrast, Northrop did not raise any objections to the Air F orce’s statements reg arding the allowability of I R& D costs. I d. Moreover, in response to another EN in which the Air F orce requested information, such as “[ . . .] /I R& D planning statements,” to substantiate how Northrop planned to fund contract performance during

-9-three specified fiscal y ears, Northrop ex

plained that “[ t] he ex ecution of this contract does not require [ . . .] /I R& D funding . . . .” I d. at 9.

As later ex plained at the GAO hearing , upon reviewing Ray theon’s EN response and consulting with the Defense Contract Manag ement Ag e ncy , the Air F orce chang ed its position with respect to the allowability of I R& D costs; it determined that Ray theon’s position was correct. I d. at 12, 17-18. According ly , in the follow-up EN that it sent to Ray theon, the Air F orce did not address Ray theon’s statements reg arding I R& D costs, id. at 12, sug g esting that it accepted Ray

theon’s position. However, in the follow-up EN that it sent to Northrop, the Air F orce did not advise Northrop that it had chang ed its position reg a rding the allowability

of I R& D costs and that its earlier statement was therefore incorrect. I d. F ur ther, althoug h the Air F orce did not send an EN reg ardingthe allowability of I R& D costs to L ockheed, it [ . . .] during discussions. I d. at 13.

I n its final proposal revision, Ray theon reduced its total proposed price to [ . . .] , which reflected an I

R& D cost reduction of [ . . .] . I d. Northrop proposed a price of [ . . .] in its final proposal revision, an amount that [ . . .] . I d. L o ckheed, in its final proposal revision, [ . . .] its total proposed price to [ . . .]
, which reflected [ . . .] . I d

.

I n its protest before the GAO, Northrop contended that the Air F orce’s cost/price discussions were misleading because the Air F orce accepted Ray theon’s understanding

of the allowability

of I R& D costs, but never advised Northrop of its chang ed understanding , preventing it from proposing I R& D cost reductions in line with the I R& D cost reductions proposed by Ray theon [ . . .] . I d. at 16. Specifically , it contended:

I f Northrop Grumman had known of the Air F orce’s chang ed interpretation, it would have responded by protesting the interpretation’s illeg ality and/or submitting a radically chang ed proposal. Northrop Grumman is a very larg e corporation with billions in assets and revenue. [

. . .] Had Northrop Grumman known of the Air F orce’s expansive view of I R& D, which permitted offerors to propose I

R& D that violated the F AR and the Air F orce instruction provided to Northrop Grumman, Northrop Grumman could have proposed the ty pes and quantities of I R& D [ . . .]

.

I d. Upon consideringall 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. I d. at 19-20. She stated that the record reflected that the Air F orce chang e d its understanding reg arding the allowability of future I R& D costs, but never advised Northrop of its chang ed understanding

. I d . at 20. She therefore opined that the Air F orce’s discussions with Northrop were misleading

and unequal. I d. The Air F orce decided to take corrective action based on the GAO attorney ’ s determinations. I d.

- 10-b. The Court’s Ruling

B a sed on the evidence in the administrative record, the court concluded that the Air F orce’s discussions with Northrop reg arding the allowability of I R& D costs were misleading and unequal. Specifically
, it ex plained:

Ray theon contends that discussions reg a rding the allowability

of I R& 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 I R& D cost reductions in response to one EN, and at the same time raised no objections to the Air F orce’s statements reg ardingthe allowability of I R& D costs in response to a separate EN. As a result, when the Air F orce decided not to pursue further discussions with Northrop reg ardingI R& D costs, there is a nonfrivolous arg ument to be made that the Air F orce was merely tailoring its discussions to Northrop’s proposal pursuant to F AR 15.306(d)(1).

Nevertheless, the evidence in the administrative record weig hs more heavily in favor of Northrop’s contention that the discussions were misleading and unequal. After the Air F orce received the contractors’ responses to the initial set of ENs, it determined that a statement it had communicated to Ray theon and Northrop reg ardingthe allowability of I R& D costs no long er accurately represented its position. B y not lodg ing any

further objections to Ray theon’s [ . . .] proposed I R& D cost reductions, the Air F orce sig naled [ . . .] that it was permissible to propose such reductions. However, the Air F orce never advised Northrop of its chang ed understanding of the allowability

of I R& D costs. Throug h its silence, the Air F orce misled Northrop into believing that it would not accept I R& D cost reductions. Moreover, by advising only Ray theon [ . . .] that it would accept I R& D cost reductions notwithstanding the lang uag e of its ENs, the Air F orce eng ag ed in unequal discussions with the contractors. At bottom, it was the Air F orce’s duty

to ensure that all three contractors were competing on a level play ing field. See, e.g ., J oseph L . DeClerk & Assocs., I nc. v. United States, 26 Cl. Ct. 35, 46 (1992), cited in [ Sy s. Application & Techs., I nc. v. United States, 691 F .3d 1374, 1383 (F ed. Cir. 2012)] ; see also F AR 1.102-2(c)(3) (requiring procuringag encies to treat all prospective contractors “fairly and impartially ”). B y misleading Northrop reg arding its position on the allowability of I R& D costs and advising only

Ray theon [ . . .] that it had chang e d its position, the Air F orce violated that duty . Consequently , the GAO attorney ’s conclusion that the Air F orce eng ag ed in misleading and unequal discussions concerning the allowability of I R& D costs was rational, and the Air F orce’s reliance on her conclusion in deciding to take corrective action was also rational.

I d. at 41.

- 11-c. Raytheon’s Contentions

Ray theon contends that the court’s conclusion that the Air F o rce acted rationally when deciding to take corrective action with respect to the misleading and unequal cost/price discussions is incorrect on two g rounds. As an initial matter, Ray theon reiterates an arg

ument that it first advanced during the merits proceeding s: the substantially similar ENs that the Air F orce sent to Ray

theon and Northrop contained a misstatement of law reg arding the allowability of I R& D costs, and the Air F orce’s failure to correct its misstatement cannot constitute misleading or unequal discussions. In its May 11, 2015 Opinion and Order, the court rejected this arg ument, concluding that the F AR’s requirement of a fair and level play ing field during all aspects of a procurement superseded the decisional law cited by Ray theon in which the courts ruled that misrepresentations of law cannot, absent unusual circumstances, form the basis for rescindingor reforming

a contract between the federal g overnment and a private party

. 3 Ray theon 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 F ederal Circuit on appeal.

Specifically , Ray

theon 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 g overnment duringthe discussions phase of a procurement and a misstatement of law discovered by

a contracting

party after the ex ecution of the contract; (2) a misstatement of law is analog ous to a patent ambig u ity and must be challeng ed prior to contract award; and (3) the court erroneously

focused on the Air F orce’s actions and disreg arded Northrop’s knowledg e of the law. The court is not persuaded by Ray theon’s contentions.

There is no question that the misstatement-of-law principle applies to contracts awarded via a competitive procurement. I ndeed, had the Air F orce advised all of the offerors that it intended to interpret the law concerning the allowability

of I R& D costs in one manner, but then, upon determining that it was mistaken, did not advise any of the offerors of its chang e d interpretation, the offeror awarded the contract would likely be unsuccessful in requesting contract reformation or rescission to remedy the leg al misstatement. Notably
, however, in those circumstances, the Air F orce would have treated the offerors equally by n o t advising any

of them of its chang ed position. I n contrast, under the circumstances that actually ex ist in this case, the Air F orce did not treat all of the offerors equally ; once it determined that its interpretation of the

3 I n the decisions relied upon by Ray theon, the party

alleg ing a misstatement of law was either the party in contractual privity with the federal g overnment or the leg al representative of the party in contractual privity . See g enerally Mills v. United States, 410 F .2d 1255 (Ct. Cl. 1969); Edwards v. United States, 19 Cl. Ct. 663 (1990); C & LConstr. Co. v. United States, 6 Cl. Ct. 791 (1984). I n contrast, althoug h Ray theon is in contractual privity with the Air F orce, it is not seeking the rescission or reformation of their contract. Rather, Ray theon is challeng ing the ability of another offeror to seek the rescission of Ray theon’s contract with the Air F orce.

- 12-law was mistaken, it sug g ested to some, but not all, of the offerors that its position had chang ed.

Therefore, reg ardless of what Northrop knew or did not know about the law concerning the allowability

of I R& D costs, it did not know how the Air F orce actually planned to treat I R& D costs–information that the Air F orce provided to Ray theon [ . . .] . W ith the benefit of the GAO attorney ’s outcome prediction statement, the Air F o rce recog n iz e d that it had supplied the offerors with different information reg arding the allowability of I R& D costs and appropriately decided to take corrective action to remedy the information disparity

. The second basis for Ray theon’s challeng e to the court’s conclusion that the Air F orce acted rationally in decidingto take corrective action is that the court erred in concluding that Northrop had established prejudice before the GAO. As with its previous contention, Ray theon first made this arg

ument during the merits proceeding s. The court rejected Ray theon’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 Ray theon’s final proposed price of [

. . .] was [ . . .] ; (3) Ray theon proposed I R& D cost reductions of [

. . .] ; and (4) Northrop is a larg e g overnment contractor with ex tensive financial resources–was sufficient to support the implicit conclusion of the GAO attorney that Northrop possessed the financial means to propose I R& D cost reductions [ . . .] , making it possible for Northrop to overcome the differential in proposed prices.

Ray theon has not persuaded the court that its orig inal ruling reg arding 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 sig nificant error in the procurement process. Data Gen. Corp. v. J ohnson, 78 F .3d 1556, 1562 (F ed. Cir. 1996). To establish prejudice, a protestor need not prove that it would have won the contract but for the alleg ed error in the procurement. B annum, I nc. v. United States, 404 F .3d 1346, 1358 (F ed. Cir. 2005). Rather, a protestor “must show that there was a ‘substantial chance’ it would have received the contract award absent the alleg ed error.” B anknote Corp. of Am. v. United States, 365 F .3d 1345, 1350 (F ed. Cir. 2004) (quoting Emery W orldwide Airlines, Inc. v. United States, 264 F .3d 1071, 1086 (F ed. Cir. 2001)). The evidence in the record before the GAO is sufficient to meet this standard. Contrary

to Ray theon’s assertion, Northrop was not required to provide the GAO with specific ex amples of I R& D cost reductions it could propose to demonstrate a substantial chance of being

awarded the contract had the Air F orce not conducted unequal and misleading discussions; it was enoug h that Northrop demonstrated its capacity to propose such cost reductions.

Moreover, in arg

uing that Northrop did not adequately establish prejudice before the GAO, Ray

theon imposes requirements on the GAO that have no basis in the law. The Air F orce’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 reg ulatory requirement that such a statement address every finding that would be required in a written decision from the GAO. I ndeed, it would defeat the purpose of outcome prediction–the prompt resolution of protests, see

- 13-4 C.F

. R. § 21.10(e) (2014)–if the assig ned GAO attorney

was required to address every element of a protestor’s claim during the outcome prediction conference. Thus, Ray theon’s attempt to impute such a requirement on the GAO attorney in this case is untenable.

I n short, Ray

theon has not established a likelihood of success on the merits, or even a substantial case on the merits, with respect to the Air F orce’s decision to take corrective action to remedy its misleading and unequal cost/price discussions.

B. The Equitable F actors

Ray theon has not demonstrated either a likelihood of success or a substantial case on the merits of its appeal. However, assuming , strictly f o r the for the sake of arg

u ment, that Ray

theon had established at least a substantial case on the merits, it would not be entitled to relief under RCF C 62(c) because, as ex plained below, Ray

theon has not demonstrated that the equitable factors weig

h in its favor.

1. Irreparable Injury

“W hen assessingirreparable injury , ‘[ t] he relevant inquiry in weig hing this factor is whether plaintiff has an adequate remedy in the absence of an injunction.’” Overstreet Elec. Co. v. United States, 47 F ed. Cl. 728, 743 (2000) (quoting Mag ellan Corp. v. United States, 27 F ed. Cl. 446, 447 (1993)); see also Young er 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”). Ray

theon first contends that it would be irreparably injured if the Air F orce was permitted to take corrective action because it would be “forced to ex pend the time, effort, and ex p ense to recompete with itself as well as with L ockheed and Northrop for the contract that [ it] already

lawfully won, and to demonstrate the maturity of technolog y ” that has already been found to be technically mature. Mot. 16. I n both of the decisions relied upon by Ray theon in support of this contention, the court determined that the corrective action proposed by the g overnment was unlawful; in other words, the protestors–the orig inal contract awardees– succeeded on the merits of their claims. See Sy s. Application & Techs., I nc. v. United States, 100 F ed. Cl. 687, 719 (2011), aff’d, 691 F .3d at 1374; Sheridan Corp. v. United States, 95 F ed. 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. Sy s. Application & Techs., 100 F ed. Cl. at 720-21; Sheridan Corp., 95 F ed. Cl. at 155.

Ray theon, however, is not in the same position as the protestors in Sy stems Application & Technolog ies and Sheridan Corp. I n its May 11, 2015 Opinion and Order, the court concluded that the Air F orce’s decision to take corrective action was a rational response to errors in the procurement. I

n other words, the court concluded that Ray theon could not be considered the lawful awardee of the EMD contract. I f the contract was not properly awarded to Ray

theon in

- 14-the first instance, Ray theon being required to compete for the contract anew does not constitute an irreparable injury . Moreover, Ray theon has not established that it is likely to succeed, or has a substantial case, on the merits of its appeal before the F ederal Circuit. As a result, the court cannot characteriz e the recompetition as unnecessary and, consequently , it cannot characteriz e Ray theon’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).

Ray theon also contends that if the Air F orce quickly takes corrective action and awards a new EMD contract before the F ederal Circuit rules on its appeal, it would be left without a remedy . This contention is not compelling . I f, after corrective action, the Air F orce awarded Ray theon the EMD contract for a second time, Ray theon 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 L ockheed or Northrop after corrective action would not moot Ray theon’s claim that the decision to take corrective action was irrational; if the Air F orce chose to proceed with contract performance with the new awardee, it would be doing so at the risk of havingits decision to take corrective action overturned and the newly awarded contract invalidated.

F inally , Ray

theon 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 ex pended additional resources to win a contract that it had already won. Such an injury

is not irreparable; Ray

theon 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.

I n sum, Ray

theon has not established that it would be irreparably injured if it was denied relief under RCF C 62(c). Althoug h 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 P arties

Under the nex t equitable factor, Ray theon argues that the harm it would suffer in the absence of relief under RCF C 62(c) outweig hs the harm to the Air F orce if the court prevented the Air F orce from taking corrective action and reawarding the EMD contract. 4 I n advancing this argument, Ray

theon does not identify

any way in which the Air F orce mig ht be injured if the court g ranted its RCF C 62(c) motion. Rather, Ray theon contends that the Air F orce would be injured if the court denied Ray theon’s motion and permitted the Air F orce to take corrective

4 Ray theon does not address the harm that mig h t be suffered by

the other interested parties–L ockheed and Northrop. A discussion of the harms that those contractors mig ht suffer if the court prevented the Air F orce from taking corrective action and reawarding the EMD contract is not necessary

for the resolution of Ray theon’s RCF C 62(c) motion.

- 15-action and reaward the EMD contract. I n those circumstances, Ray theon asserts, the Air F orce would be ex pending resources for an unnecessary recompetition.

I n its response to Ray

theon’s RCF C 62(c) motion, defendant, unsurprising ly , describes how the Air F orce would be harmed if it was not permitted to proceed with corrective action. I t g enerally contends that if the court granted Ray theon’s motion, the Air F orce’s mission would be adversely affected and the Air F o rce would incur additional costs to sustain the ex isting radar sy stem. Specifically , it contends that (1) the ex isting radar sy stem “[ . . .] , limiting the sy stem’s ability to disting uish between our aircraft and an adversary aircraft” and rendering

the 3DEL RR sy stem critical to national defense; (2) the ex isting radar sy stem “is reaching the end of its service life and is becomingmore difficult and costly to maintain”; (3) because each ex isting radar sy stem is operational only [ . . .]
, the Air F orce must [ . . .] ex isting radar sy stems “[ . . .] to ensure that near-continuous air surveillance can be maintained to support ong oing operations”; and (4) there are “diminishing

manufacturing

sources for spare parts and material shortages,” leading to increased maintenance costs for the ex isting radar sy stem. Def.’s Resp. 17-18 (rely ing o n a declaration from Steven D. W e rt, the Air F orce Prog ram Ex e cutive Officer for B attle Manag ement at the Air F orce L ife Cy cle Manag e ment Center, Hanscom Air F o rce B a se, Massachusetts). I

n sum, defendant asserts that the delay in the 3DEL RR procurement that would result from preventing

the Air F orce from taking corrective action would be harmful because the Air F orce would be required “to ex tend the useful life of an increasing ly ex pensive and less effective radar sy

stem.” I d . at 18.

Ray theon disputes defendant’s assertion that the Air F o rce would be harmed if the court prevented it from taking

corrective action. I

n particular, Ray

theon contends that the Air F orce cannot be very concerned over the prospect of a delay in the 3DEL RR procurement because (1) it did not seek to override the automatic stay of performance put in place when Northrop and L ockheed lodg ed their protests at the GAO and (2) it voluntarily stay ed taking corrective action during the pendency

of this bid protest. 5 However, Ray theon fails to acknowledg e that the GAO is required by

statute to resolve bid protests within 100 day s, 31 U.S.C. § 3554(a) (2012), and that a procuring

ag ency ty p ically will ag ree to maintain the status quo if the United States Court of F ederal Claims agr ees to resolve the bid protest in an ex peditious manner. In other words, the delay s in those circumstances are known quantities. I n contrast, even when the F e deral Circuit ag rees to an ex pedited briefing and arg ument schedule for an appeal, as it has in this case, it is not oblig ated to issue an ex pedited decision on the appeal. B ecause the date of the F ederal Circuit’s decision cannot be ascertained, the Air F orce would have no way of knowing h ow long the 3DEL RR procurement mig ht be delay e d if the court g ranted Ray theon’s RCF C 62(c) motion.

5 Ray theon advances a number of other arg uments reg arding the harm that mig ht be suffered by

the Air F o rce if the court prevented the Air F orce from taking corrective action. However, those arg

uments are aimed at the substance of Mr. W e rt’s declaration, and not at the harm alleg ed by

defendant in its response to Ray theon’s RCF C 62(c) motion. According ly , the court declines to address them.

- 16-The court finds that the Air F orce would be harmed by such an indeterminate delay in a critical procurement.

I n fact, contrary

to Ray theon’s contention otherwise, the delay of the 3DEL RR procurement could be substantial if the court g ranted Ray

theon’s RCF C 62(c) motion. I n a declaration filed with the F ederal Circuit and subsequently filed in this court, the Air F orce represents that it does not anticipate completing its corrective action and reawarding the EMD contract until early December 2015–approx imately six months from now. Thus, if the court g ranted Ray

theon’s RCF C 62(c) motion but the F e deral Circuit denied Ray theon’s appeal, the delay to the 3DEL RR procurement would equal the time that the F ederal Circuit took to issue its decision (briefing

and arg ument will themselves take three months), plus the six months the Air F orce needs to take corrective action. I n short, the delay w ould be at least nine months.

To conclude, g iven that Ray theon has not established an irreparable injury and that defendant has demonstrated that a delay could seriously

harm the Air F orce, the balance of harms does not weig h in Ray

theon’s favor.

3. P ublic Interest

I n addressingthe third equitable factor, Ray theon correctly

asserts that “the public has a strong and overriding

interest in maintaining the integ r ity of the procurement process.” Mot. 17- 18. I t arg ues that the Air F orce’s decision to take corrective action and the court’s conclusion that the Air F orce’s decision was rational “will upset a lawful contract, and sanction a subsequent unfair competition in which Ray theon must compete ag ainst itself for a contract it already won, due to” the Air F o rce’s disclosure of its price to L ockheed and Northrop during postaward debriefing s. I d. at 18. Ray theon also contends that “the diversion of critical Ag ency resources to an unnecessary competition . . . thwarts the public interest.” I d.

Defendant, in turn, advances three reasons why the public interest supports allowingthe Air F orce to proceed with its corrective action. F irst, it contends that the court has already

ex amined and upheld the Air F o r ce’s decision to take corrective action, and that there is a public interest in allowing an ag ency to conduct a procurement without ex cessive judicial interference. Second, it asserts a national security interest in replacing

the ex isting , ag ing radar sy stem with a radar sy stem that is capable of detecting current threats. Third, it arg ues that the public’s interest in the integ rity

of the procurement process is best served by having the Air F orce conduct the 3DEL RR procurement in accordance with the solicitation and the F AR, 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 F AR. See, e.g ., B ona F ide Cong lomerate, I nc. v. United States, 96 F e d. Cl. 233, 242 (2010); PGB A, L L C v. United States, 57 F ed. Cl. 655, 663 (2003); Overstreet Elec., 47 F e d. Cl. at 744. I n this

- 17-case, the Air F orce determined that corrective action was necessary to comply

with the solicitation and the F AR, and the court concluded that the Air F orce’s determination was rational. Consequently , the public’s interest in an open and fair competition is alig ned with the status quo. Ray

theon has therefore not established that the public interest weig h s in its favor.

C. Weighing the F our F actors

I n sum, Ray

theon has not demonstrated either a likelihood of success or a substantial case on the merits of its appeal. Nor has Ray theon established that the remaining equitable factors–irreparable injury , injury to the other interested parties, and the public interest–weig h in its favor. According ly , Ray theon is not entitled to relief under RCF C 62(c).

III. CONCLUSION

F or the reasons set forth above, the court DENIES Ray theon’s motion for a stay

of the court’s judg ment and to enjoin the Air F orce 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 ag reed-to proposed redactions. Then, by no later than Wednesday, June 17, 2015
, the parties shall file a joint status report indicating their ag reement with the proposed redactions, attaching a copy of those pages of

the court’s ruling containing proposed redactions, w ith all proposed redactions clearly indicated.

Also, the parties have not ye t filed redacted versions of all of the documents that they filed under seal. 6 Parag raph 12 of the F ebruary 12, 2015 amended protective order contemplates that the parties will complete the redaction process promptly

. According ly , the parties shall be in full compliance with the redaction requirement as soon as possible, but by no later than F riday, July 10, 2015

.

IT IS SO ORDERED.

s/ Marg aret M. Sweeney MARGARET M. SW EENEY J udg e

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.

- 18-