# In th e United States Court of Federal Cl aims

No. 13-71C (F iled Under Seal: Aug

ust 13, 2014) ( Reissued for Publication: Aug u st 25, 2014) *

************************************* COASTALENVI RONMENTAL GROUP, * I NC., * B id Protest; Supplemental Administrative

* Record; RCF C 11(c)(3), Order to Show Plaintiff, * Cause; RCF C 11(b)(3), F actual B asis for

* Representations to the Court; RCF C

v. * 11(c)(2), Motion for Sanctions; I nherent

* Power to Sanction; B ackdated Document; THE UNI TED STATES, * Affidavit That Conflicts W ith Other

* Materials; Sanctions I mposed Defendant. *

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

B r ian W . Craver, W a shing ton, DC, for plaintiff.

Devin A. W olak, United States Department of Justice, W ashing ton, DC, for defendant.

OP INION AND ORDER

SWEENEY , J udg e

This bid protest concerns the procurement of soil remediation services by the United States Environmental Protection Ag e ncy (“EPA”). I

n its initial complaint, plaintiff contended that the contracting

officer improperly

awarded the contract to another bidder despite her beliefs that the awardee’s bid was nonresponsive and that the awardee was not responsible. The EPA subsequently

terminated the contract for its convenience, leading defendant to move for dismissal of the protest as moot. Plaintiff opposed the dismissal of its protest, and soug h t leave to amend its complaint to challeng e the EPA’s apparent decision to cancel the procurement. I n a December 16, 2013 Opinion and Order, the court concluded that plaintiff’s orig inal protest was moot, but allowed plaintiff to file a supplemental complaint challeng ing the EPA’s purported cancellation decision. 1

* This reissued Opinion and Order incorporates the redactions of the names of former defense counsel and ag ency counsel proposed by

defendant on Aug

u st 22, 2014. The names are substituted with “[ former defense counsel] ” and “[ ag ency counsel] ,” as appropriate.

1 B ecause plaintiff soug

h t to amend its complaint to set out events that occurred after it filed its protest, the court treated plaintiff’s motion for leave to amend its complaint as a motionAfter plaintiff filed its supplemental complaint, defendant filed a supplemental

administrative record containing documents pertainingto the EPA’s decisions to terminate the orig inally awarded contract and to use ex isting contracting vehicles to satisfy

its soil remediation needs. Upon comparing

the supplemental administrative record with the factual contentions contained in defendant’s earlier filing s, 2 the court became concerned that some of those contentions may

have lacked evidentiary

support in violation of RCF C 11(b)(3). According ly
, the court directed defendant to show cause why it had not violated that rule.

I n the course of investig ating the apparent inconsistencies between the supplemental administrative record and its earlier statements, defendant discovered that one of the documents in the supplemental administrative record contained incorrect information and was actually created ten months after the date indicated on the face of the document. The discovery of this inaccurate, backdated document caused the parties and the court to question the integ rity of the entire administrative record. This concern was addressed in subsequent filing s by the parties–including two motions for sanctions filed by plaintiff–and discussed during proceeding s conducted by

the court to address whether defendant engag ed in sanctionable conduct.

Upon reviewing

the parties’ submissions and hearing argument, the court concludes that defendant eng ag ed in sanctionable conduct and that the imposition of sanctions is appropriate for some of that conduct. Most sig n ificantly , the court finds that EPA personnel acted in bad faith by manufacturing

an inaccurate, backdated document; including that document in the supplemental administrative record; and certify ing that the supplemental administrative record constituted an accurate record of the relevant EPA actions. As discussed in more detail below, the court sanctions the EPA for its misconduct.

I. BACK G ROUND

On March 29, 2012, the EPA issued an invitation for bids to remediate the soil on as
many as 2,600 residential properties at the Omaha L ead Site (“OL S”) in Omaha, Nebraska. The EPA ultimately

awarded the contract to PK Manag ement Group, I nc. (“PK”). After an unsuccessful protest before the United States Government Accountability Office, plaintiff lodg ed a protest in the United States Court of F ederal Claims (“Court of F ederal Claims”), alleg ing that the EPA improperly awarded the contract to a bidder with a nonresponsive bid and that the United States Small B usiness Administration improperly determined that PK was a responsible bidder in the absence of a finding that PK submitted a responsive bid. Defendant, who at that time was represented by [ former defense counsel] of the United States Department of J ustice

to supplement its complaint pursuant to Rule 15(d) of the Rules of the United States Court of F ederal Claims (“RCF C”).

2 These earlier filing s were not prepared or submitted by defendant’s present counsel of record.

-2-(“DOJ ”), filed an administrative record. However, before the parties completed briefing on the merits of the protest, defendant advised the court in a March 5, 2013 notice that the “EPA intend[ ed] to terminate for convenience the contract that it awarded to PK in this procurement, thereby concluding the procurement,” and “then reassess its needs for these lead remediation services.” Consequently , defendant stated, it intended to move for dismissal of the protest as
moot.

As defendant represented, the EPA terminated its contract with PK and defendant moved to dismiss the protest, noting , among other thing s, that the EPA intended to issue a new solicitation for soil remediation services in the near future and that plaintiff would be entitled to compete for this contract if it chose to do so. Plaintiff opposed defendant’s motion. On J uly 9, 2013, after the parties had concluded briefing , defendant filed another notice indicating that federal g overnment sequestration had adversely affected the EPA’s procurement of soil remediation services and that, as a result, the EPA intended to satisfy its remediation needs throug h ex isting contracts, rather than throug h a new contract as defendant previously represented in its motion to dismiss. 3 I n response to the court’s request for supplemental briefing , defendant filed a renewed motion to dismiss, which plaintiff also opposed.

After briefing

on the renewed motion to dismiss was complete, Devin A. W o lak entered an appearance in the protest, replacing [ f ormer defense counsel] as counsel of record for defendant. Thereafter, plaintiff moved to amend its complaint to challeng e the EPA’s purported cancellation of the soil remediation procurement. I n its December 16, 2013 Opinion and Order, the court concluded that plaintiff’s initial protest was moot, but that plaintiff could file a supplemental complaint adding alleg ations relating to the EPA’s purported cancellation decision.

A. The Supplem ental Adm inistrative Record and the Show C ause Order

Plaintiff filed its supplemental complaint on December 20, 2013, adding a claim challeng ing the EPA’s purported cancellation of the orig inal procurement, i.e., the procurement that resulted in the award of the contract to PK. Supplemental Compl. ¶¶ 28-40. Defendant subsequently

filed a supplemental administrative record containing documents relatingto the EPA’s termination of its contract with PK for the g overnment’s convenience and the EPA’s decision to use ex isting contract vehicles to satisfy its soil remediation needs. Attached to the supplemental administrative record was the following certification:

CERTI F I CATI ON OF CONTRACTI NG OF F I CER F OR SUPPL EMENTAL ADMI NI STRATI VE RECORD REGARDI NG SOL I CI TATI ON SOL -R7-00016 AND MATTERS RAI SED I N THE AMENDED COMPLAI NT F I L ED B Y

3 Sequestration refers to the sig nificant automatic cuts to federal g o vernment spending that went into effect on March 1, 2013. See B udg et Control Act of 2011, Pub. L . No. 112-25, 125 Stat. 240, amended by American Taxpay er Relief Act of 2012, Pub. L . No. 112-240, § 901, 126 Stat. 2313, 2370 (2013).

-3-COASTALENVI RONMENTAL GROUP, I

NC., I N B I D PROTEST F E D . CL . NO. 13-71C

I , Yolanda Nero, contracting officer and custodian of the contracting office files for Solicitation SOL -R7-00016, hereby certify , to the best of my knowledg e and belief, and after careful review, that the following documents constitute the record of administrative actions performed with respect to the above-referenced solicitation that are relevant to the issues raised in the plaintiff’s amended complaint. The documents contained in the administrative record are the documents maintained in accordance with this ag ency ’ s procurement reg ulations, F AR § 4.803, as well as documents identified in Appendix C to the Rules of the United States Court of F ederal Claims.

This certification, dated J anuary 31, 2014, was ex ecuted on Ms. Nero’s behalf by her supervisor, Carlethia Thomas, who is the Acquisition Section Chief for EPA Reg ion 7.

B e lieving that there were additional documents that would support its claim, plaintiff moved to supplement the administrative record. I n a F ebruary

21, 2014 order, 4 the court denied plaintiff’s motion. However, upon reviewing the parties’ briefs and the supplemental administrative record, the court became troubled by the apparent inconsistencies between the evidence in the record and several of defendant’s prior representations to the court relating to (1) the EPA’s intent in March 2013 to issue a new solicitation for soil remediation services and (2) the role that sequestration play ed in the EPA’s eventual decision not to issue a new solicitation. Thus, in the same order, the court wrote:

W ith respect to the first issue, defendant made the following affirmative statements in its March 11, 2013 motion to dismiss:

• “The ag ency is currently reassessing

its needs with respect to the lead remediation services that were the subject of the terminated contract. I

t intends to issue a new solicitation in the near future.” Def.’s Mot. 1.

• “[ T h e EPA] is currently reassessing

its need for the lead remediation services provided for in the contract with PK, and intends to issue a revised solicitation in the near future.” I d. at 5.

However, there are no documents in the administrative record supporting defendant’s March 11, 2013 assertion that as of that date, the EPA “intend[ ed] ” to

4 The court initially

filed this order under seal. I t reissued the decision for public availability

on F e bruary

28, 2014.

-4-issue a new or revised solicitation “in the near future.” I n fact, the only

document in the record dated on or before March 11, 2013, that addresses this topic–a March 8, 2013 OL S briefing document–indicates that the [ L a wson Environmental Services L L C (“L awson”)] contract mig ht “supply sufficient quantity

to complete the work based on sampling results,” and that “[ a] new contract could be issued in the future if necessary .” [ Administrative R. (“AR”)] 1158. I n other words, it appears that at the time that defendant made its assertion, the EPA did not intend to issue a new or revised solicitation “in the near future”; rather, the EPA was merely contemplating that a new contract could be issued if the results of the sampling reflected that work could not be completed under the L awson contract.

W ith respect to the second issue, defendant made the following affirmative statements in its J uly

9, 2013 notice and its September 23, 2013 reply in support of its renewed motion to dismiss:

• “Since [ March 11, 2013] , Government sequestration has decimated EPA’s budg et, forcing the ag ency

to furloug h its employ ees. As a result of these severe budg et constraints, EPA has decided to satisfy its lead remediation needs throug h

ex isting contracts . . . . EPA will, thus, chang e the scope of the requirement of the disputed solicitation from a remediation contract to a contract for securing property access ag reements.” Notice 1.

• “L ong -term sequestration has forced EPA to take a hard look at its budg et. I t has determined that it can save money by satisfy ing its lead remediation needs under [ ] ex isting contracts.” Def.’s Reply

11.

However, the administrative record contains only one reference to sequestration’s effect on the EPA’s decision not to issue a new soil remediation contract, and that reference indicates that sequestration did not affect the EPA’s decision. I n a J u ly 23, 2013 electronic-mail messag e, an employ ee at the EPA’s District 7 office advised an individual at EPA headquarters: “[ T] he [ termination for convenience] was not the result of sequestration but the new contract was the result of reviewing and reworking

the statement of work.” AR 1212; see also id. at 1211 (ex plaining that the EPA reassessed its needs for a second remediation contractor because there did not appear to be as many properties needing

remediation as it orig inally believed). There are no other references to sequestration in the administrative record; moreover, there are no affirmative statements that any sort of financial constraints play e d a role in the EPA’s decision not to issue a new contract. The only stated reason for the EPA’s decision was the lower-thananticipated number of properties requiring remediation.

-5-Order 3-4. B ased on these inconsistencies, the court ex pressed its concern that by filing its March 11, 2013 motion to dismiss, its J uly 9, 2013 notice, and its September 23, 2013 reply
, defendant made factual contentions without evidentiary support in violation of RCF C 11(b)(3). The court therefore directed defendant to show cause why that rule was not violated by

ex p laining the evidentiary basis for the statements at issue and citing to the relevant portions of the administrative record. The court also directed defendant to identify who was responsible for the inconsistencies.

B. Discovery of an Inaccurate, Backdated Docum ent

Defendant initiated an investig ation so that it could prepare a response to the show cause order. During

the course of this investig a tion, defendant discovered a problem with one of the documents in the supplemental administrative record–a document titled “Determination and F inding s” that alleg edly

was sig n ed by

Ms. Nero on March 11, 2013. This document purported to provide the basis for the EPA’s termination of its contract with PK for the g overnment’s convenience, and provided, in part:

19. A [ termination for convenience] determination and findingwas written on March 11, 2013, for the following reasons:

a. Given the progress that has been made on the site in acquiring access, sampling and residential property cleanup over the two construction seasons during the delay s in contractingcaused by challeng es and protests, it was determined that EPA had the ability to achieve the remediation of the remainingavailable properties at the Omaha L ead site on the ex isting contract to perform the remaining soil remediation work.

b. I ncreased costs to [ sic] P.K. Manag ement, I nc[

. ] was incurring due to the protests and challeng es.

AR 1159-61.

Defendant advised plaintiff on March 6, 2014, that there was an undisclosed problem with this document and that the document mig ht need to be withdrawn from the administrative record. Plaintiff thereafter filed a second motion to supplement the administrative record, requesting permission to conduct depositions to ascertain the circumstances surrounding the creation of the problematic document and any additional discovery

that the court deemed to be appropriate.

I n its response to plaintiff’s motion, defendant disclosed two issues with the document at issue. One issue was that parag raph 19(a) appeared to be inaccurate. The other issue was that

-6-the document was actually created after-the-fact, and then backdated. I n particular, defendant reported:

Counsel for the defendant and ag ency counsel inquired about the apparent inconsistencies, and the contracting officer informed both counsel that she had actually prepared the March 11, 2013 [ Determination and F inding s] in early J anuary 2014, then backdated it to March 11, 2013, and she had not informed counsel that she had done this when she produced it as a document to be included in the supplementation to the certified administrative record. The defendant is still in the process of investig ating why this happened, including why there appears to have been a disconnect between what the contracting officer thought about EPA’s requirements on March 11, 2013, and what those requirements actually were.

Def.’s Resp. 4. Defendant requested that it be permitted to address this document more fully in its y et-to-be-filed response to the show cause order so that it could have additional time in which to investig ate the document’s creation.

The court convened a telephonic status conference on March 20, 2014, to discuss defendant’s revelations. Participants in the conference included counsel of record for the parties and EPA counsel, [ ag e ncy counsel]

. 5 During the status conference, the court advised the parties that defendant’s revelations were very troubling , and placed the integ rity of the administrative record into doubt. 6 I t indicated that it would entertain a request from plaintiff for an award of the attorney ’s fees and costs that plaintiff incurred in addressing the issues related to the inaccurate, backdated document. The court also stated that it was inclined to permit plaintiff to depose Ms. Nero reg arding the inaccurate, backdated document. At the conclusion of the status conference, as reflected in a subsequent order, the court directed defendant to address all of the outstanding ethical issues in its response to the show cause order, g ranted plaintiff leave to file a reply in support of its supplementation motion and response to defendant’s response to the show cause order, and scheduled proceeding s to discuss the show cause order and hear arg ument on plaintiff’s supplementation motion.

5 Defendant did not include [ ag ency counsel] ’s name on any

filing s with the court until F ebruary 18, 2014, when it filed its response to plaintiff’s first motion to supplement the administrative record. Documents submitted by defendant in the appendix attached to its response to the show cause order reflect that [ a g ency counsel] ’s involvement in this case beg an no later than F ebruary

15, 2013. App. 1.

6 All three attorney s appearing at the status conference were equally troubled by the disclosed conduct. Mr. W olak and [ ag ency counsel] further stated that they were taking

the issue
very seriously

.

-7-C. Def endant’s Response to the Show Cause Order

Defendant filed its response to the show cause order on April 7, 2014, addressing three main topics: (1) the inconsistencies between defendant’s statements to the court and the administrative record pertaining to the EPA’s intent to issue a new solicitation in the near future; (2) the inconsistencies between defendant’s statements to the court and the administrative record pertaining to the effect of sequestration on the EPA’s decision not to pursue a new soil remediation contract; and (3) the inaccurate, backdated document. W ith respect to the first two topics, defendant g enerally ex p lained that the statements quoted by the court were based upon information provided to counsel by Ms. Nero and Ms. Thomas. According to defendant, because there was no “formal recordkeeping requirement” for the EPA’s decisions reg arding whether and when to issue a solicitation for a new soil remediation contract, those decisions “were not memorializ ed in documents that would be included in a bid protest administrative record.” Def.’s Show Cause Resp. 2-3. Therefore, defendant submitted ex trarecord documentation of the information counsel was provided–mainly electronic-mail messag es and three declarations–in an appendix attached to its response.

Defendant then addressed the inconsistent statements in more detail. F irst, it asserted that its statements reg arding the EPA’s intent to issue a new solicitation in the near future were based on communications from the EPA’s contracting office, which had decided to issue a new solicitation after consultation with the relevant EPA prog ram office. However, defendant

ex p lained, the prog ram office had been reconsidering the need to issue a new solicitation even during its consultations with the contracting office, and ultimately , after defendant made its representations to the court, the EPA decided not to issue the new solicitation. I n other words, defendant averred that its representations to the court were accurate at the time they were made. Defendant’s assertions are supported by electronic-mail messag es sent by EPA employ ees that defendant included in the appendix attached to its response. See, e.g ., App. 2-5, 17, 23, 27-28.

Second, defendant averred that its statements reg arding the effect of sequestration on the EPA’s decision not to pursue a new soil remediation contract were based on communications from Ms. Thomas and David Drake, Ph.D., the Special Emphasis Remedial Section Chief in the Superfund Division in EPA Reg ion 7. Specifically , defendant exp lained that both Ms. Thomas and Dr. Drake understood that the decision not to solicit a new contract was due to the reduced need for soil remediation at the OL S. However, defendant stated, Ms. Thomas believed that sequestration also play ed a role in the decision, and that when [ former defense counsel] inquired about the status of the procurement in J uly 2013, both Ms. Thomas and Dr. Drake confirmed that sequestration was the basis for the EPA’s decision. Thus, with respect to its representation in the J uly 9, 2013 notice that sequestration affected the EPA’s decision not to issue a new soil remediation contract, defendant contended that its statement accurately reflected what the EPA had told [ former defense counsel] as of that date. Defendant further contended that this same information from the EPA supported [ former defense counsel] ’s similar representation reg arding sequestration contained in the September 23, 2013 reply brief.

-8-Electronic-mail messag es in the appendix attached to defendant’s response support

defendant’s assertion that Ms. Thomas and Dr. Drake understood that the decision not to pursue a new soil remediation contract was due to the reduced number of properties requiring remediation. See id. at 15-16 (containing a March 2013 assessment of the number of remaining properties requiring

remediation), 39 (reflecting the May 2013 decision to issue a new contract for securing

site access), 63-64 (describing the decision to chang e the scope of the requirement from a contract for soil remediation to a contract for obtaining property access ag reements). Additional messag e s support defendant’s assertion that as of J u ly 9, 2013, [ former defense counsel] had been advised by the EPA that sequestration resulted in the EPA’s decision not to issue a new soil remediation contract. See id. at 63-64. Specifically
, these messag e s reflect that Ms. Thomas understood that the EPA’s decision was due to sequestration; that Dr. Drake confirmed Ms. Thomas’s understanding ; that Ms. Thomas therefore advised [ ag ency counsel] that the EPA’s decision was due to sequestration; and that [ ag ency counsel] passed this information on to [ former defense counsel] on J uly 8, 2013. I d. at 63-64, 69; see also id. at 73- 74, 77-78, 80-81, 91-92, 95-96, 100-01, 129-39 (indicating
, in g uidance provided to Ms. Thomas from her superiors, that EPA contracting offices should analy

z e ex isting contracts, planned acquisitions, and acquisitions in prog ress to determine potential cost saving s, and that this information should be reported up the chain of command), 97-98, 122 (describing the EPA’s temporary prohibition on awarding new contracts, effective March 5, 2013, pending the development of an operating plan in response to sequestration, and noting an ex ception for mission critical actions), 115-16 (confirming , in a March 20, 2013 memorandum sent to Reg ional Superfund Division Directors, that work within the Superfund Remedial Prog ram, such as the
ong oing soil remediation work at the OL S, was mission critical). However, Dr. Drake later indicated that his confirmation of Ms. Thomas’s understanding had been mistaken. I

n an April 7, 2014 declaration included in defendant’s appendix , Dr. Drake stated that he should not have confirmed that sequestration was the reason for the EPA’s decision not to issue a new soil remediation contract. I d. at 206. He ex plained that there are “no budg et constraints” at the OL S and that “[ t] h e project is fully funded and has ex cess fundingin a dedicated site-specific special account.” I d. He also stated:

Sequestration play ed a minor ancillary role in my

opinion but I believe it is relevant to some degr ee. The main role that sequestration play e d was the delay

of the reprocurement activities, and with delay or the passag e of time, the information from the Omaha L ead Site database becomes more accurate. Sampling and remediation work continued at the Omaha L ead Site during sequestration. Thus the estimates of future remediation needs are more accurate over time as more information is g e nerated so the contracting and re-procurement delay s associated with sequestration ultimately helped to better scope the needs of the project.

I d.

-9-F inally , defendant addressed the inaccurate, backdated document supplied by the EPA in

the supplemental administrative record and the EPA’s certification of the supplemental administrative record. I

t asserted that the normal procedure in the EPA Reg ion 7 contracting office was for a Determination and F inding s document to be prepared at the time a contract is terminated, but that Ms. Nero failed to do so for the PK contract termination in March 2013. Thus, defendant ex plained, when Ms. Nero learned in J anuary 2014 that the administrative record filed with the court required supplementation, she prepared the missing Determination and F inding s document, edited it at the direction of Ms. Thomas, and backdated it to March 11, 2013. Defendant further represented that Ms. Thomas was unaware that Ms. Nero backdated the document, and that she relied on the work of Ms. Nero when she certified the supplemental administrative record on Ms. Nero’s behalf. I n p r oviding this ex planation, defendant accurately relay ed the statements made by Ms. Nero and Ms. Thomas in their declarations. However, the validity of some of those statements is questionable, especially in lig h t of other documents included in the appendix attached to defendant’s response; thus, the court describes this documentation and the relevant portions of the declarations in more detail.

The key documentation in defendant’s appendix is a string of electronic-mail messag es from J anuary

6 and 7, 2014, between Ms. Nero and Ms. Thomas. I n a J anuary

6, 2014 messag e to Ms. Thomas, Ms. Nero wrote: “Here is a DRAF T COPY of the [ D etermination and F inding s] with the chang es y ou requested for the [ termination for convenience] done on PK Manag ement.” I d. at 158. Parag raph 19 of the attached draft document provided:

A [ termination for convenience] determination and findingwas written on March 10, 2013, for the followingreasons:

a. I ncreased costs to [ sic] P.K. Manag ement, I nc[ .] was incurring due to the protests and challeng es.

b. Given the prog ress that has been made on the site in acquiring access, sampling and residential property cleanup over the two construction seasons during the delay s in contractingcaused by challeng es and protests, it was determined that EPA had the ability to achieve the remediation of the remainingavailable properties at the Omaha L ead site on the ex isting contract to perform the remaining soil remediation work.

I d. at 161. The following morning , Ms. Thomas responded: “Ok. Recommend y ou make item b the primary

reason we did the [ termination for convenience] and the financial hardship

ex p erienced by

the contractor as the second reason.” I d. at 158. Six teen minutes later, Ms. Nero replied: “Yes [ Ma’am] . W ill . . . make those chang e s, sig n and date it.” I d . I n other words, this electronic-mail ex chang e reflects that Ms. Nero and Ms. Thomas had been working on a draft document prior to Ms. Nero’s J anuary 6, 2014 messag e; that Ms. Thomas read parag raph 19 and recommended that it be edited; and that Ms. Nero intended to make the recommended chang e before sig n ing and dating it.

- 10-Ms. Nero’s declaration is g enerally consistent with the J anuary 2014 electronic-mail

ex c hang e . Ms. Nero stated:

1. Iam a ContractingOfficer in Reg ion 7 of the United States Environmental Protection Ag ency (EPA or Ag ency

). I have been in this position since F ebruary

2001. Ihave worked at EPA for approx imately 13.5 y ears. . . . I am aware that this declaration will be used in official proceeding s, specifically a bid protest broug ht by Coastal Environmental Group, I nc., at the United States Court of F ederal Claims, docket no. 13-71C.

. . . . 4. Due to a major chest surg ery , I was phy sically out of the office from December 12, 2012 throug h F ebruary

08, 2013 and had minimum direct involvement in the discussions and/or decisions made reg arding the above referenced contract during that time. My

supervisor handled all actions on this contract during

my absence. On F ebruary

11, 2013, I phy sically

returned to work and resumed my work activities and became acclimated to the actions that had taken place during

my absence.

. . . .
8. On March 6, 2013, I

issued a Notice (No Cost) of Termination for Convenience (T4C) to PK Manag ement I nc. based on my supervisor’s (L ee Thomas) handwritten notes as my supporting documentation. . . .

9. On March 11, 2013, I

issued a bi-lateral No Cost T4C Modification sig ned by both PK Manag e ment Group and my self. . . .

10. After the T4C modification was issued, the nex t step was to prepare a [ determination and finding s (D& F )] memorandum that summariz ed my actions
per my supervisor’s internal policy . Idid not write the D& F at that time which was an oversight. L ater, in reviewing the file, I corrected the oversig

ht by completing a D& F that tied the facts and actions of the determination tog ether to support the T4C modification.

11. On J anuary

7 [ sic] , 2014, after [ the Office of General Counsel] informed my

supervisor via email that we need[ e d] to provide additional information for the administrative record in the ong oing Court of F e deral Claims case involving Coastal, Iprepared the D& F and included the additional information received from the Superfund Prog ram office and referenced in item 19a of the D& F

.

- 11-12. The D& F memorandum included an action item that was not accurate

at the time the T4C was issued. I tem 19a was not applicable to the justification for the T4C action. I

nstead, it was information received from the Superfund Prog ram office that applied to the justification to not re-procure the soil remediation services after the T4C action.

13. Idid not realiz e that back-dating the D& F would result [ in] such dire consequences. I

back-dated the D& F document not realiz ing the damag e it caused to our T4C action. The intent of the back-dating was to support the T4C action already taken to complete the contract file. My poor judg ment was not a willful or intentional act to deceive. I t truly was an honest human mistake.

14. Since my

tenure as a contracting

officer, I have strived to serve as a
g ood steward of the federal g overnment. I have maintained a strong demonstration of g ood will and character throug h out the y ears of service as a contracting

officer.

I d. at 163-66. Portions of Ms. Thomas’s declaration, however conflict with the electronic-mail

ex c hang e . Ms. Thomas declared:

1. Iam the Acquisition Section Chief, Acquisition Contracts & Manag ement Section, Reg ion 7, Environmental Protection Ag ency . Ihave been in this position since November 2007.

2. Iam aware that this declaration will be used in official proceeding s, specifically

a bid protest broug ht by

Coastal Environmental Group, I nc., at the United States Court of F ederal Claims, docket no. 13-71 C.

. . . . 22. Yolanda Nero was the Contracting Officer of record for the [ P.K. Manag ement Group, I

nc (PKMG)] contract. She was not involved in the termination of the PKMG contract as she had been on ex tended sick leave throug

h F ebruary 11, 2013. During her absence, I conducted the termination activities with PKMG and provided Yolanda handwritten notes which she used to issue the termination notice and subsequent termination modification.

23. Despite Yolanda’s noninvolvement in the events leading up to the termination of PKMG, she had returned to work in time to perform the tasks
necessary to formaliz e the termination. Included amongthose tasks was the requirement to complete a memorandum to the file about the termination. This documentation requirement is my own, I put it in place in J anuary 2008, and the purpose is to prepare memorandums or summary n o tes to tie tog ether the various

- 12-emails and notes that were used to support a modification action. Normally the COs prepare[ ] the memos when performing contract file maintenance activities.

24. Yolanda developed the document in J anuary 2014 and forwarded me an electronic version so I

could verify

the information since she had not been involved. The electronic version did not include a sig nature or date. The memo contained information about puttingthe work on the ex isting contracts which was not the situation at the time but I completely missed it during my

review. That information was not in my notes but was obtained from the prog ram customer via an email after the termination for convenience was done.

25. Yolanda showed me the stack of documents she intended to submit to the Contracts and Department of J ustice Attorney s, but I did not screen the documents to verify

or check any

information. Yolanda cc’d me on her email submission but I did not open the email. I just considered that email as proof that she g ot the documents sent.

26. After learning

that Yolanda had backdated a document, I counseled her and told her effective immediately . . . not to eng ag e in any activities as a Contracting Officer until further notice. I was not authoriz ed to suspend her warrant so I

contacted Raoul Scott, EPA, OAM, Reg ional Procurement Operations Division, and informed him of the situation. Mr. Scott has since suspended Yolanda’s warrant indefinitely

.

. . . .

27. W hen Yolanda was out of the office on her compressed day off, I was asked to review the Administrative Record and certify if it was accurate correct [ sic] . Iwas informed that this needed to be a very quick process and as I

had done in the past, when a CO has been absent, I sig ned certify ing that the record was accurate and complete as I had no reason to think otherwise. I erred in certify

ing the record as accurate and complete because I did not scan down the list of attachments reflected in the table of contents to check each document.

I d. at 185-92. W ithin these quoted paragraphs Ms. Thomas, problematically , implies that she was unaware that Ms. Nero had not prepared a Determination and F inding s document in March 2013 when the contract with PK was terminated (even thoug h it was apparent that the document that Ms. Nero provided to Ms. Thomas in J anuary 2014 was a draft); implies that she was unaware that Ms. Nero intended to backdate the document (even thoug h parag raph 19 of the draft document indicates that the document “was written on March 11, 2013,” id. at 161); and states that she “completely

missed” the fact that the draft document contained incorrect information in
parag raph 19 (even thoug h she read and sug g e sted a chang e to parag raph 19 in J a nuary 2014 to

- 13-reflect that the incorrect information be deemed the primary reason for the termination for convenience).

D. Def endant’s Motion to Supplem ent the Adm inistrative Record

Defendant’s response to the show cause order left open an important issue: what to do with the administrative record currently on the protest docket? Defendant had previously indicated–in its March 14, 2014 response to plaintiff’s second motion to supplement the administrative record and during the March 20, 2014 status conference–that it intended to recertify the administrative record. I t then requested, in its response to the show cause order, a deadline of April 11, 2014, to accomplish the recertification. F inding defendant’s request to recertify the administrative record to be vag ue, the court directed defendant to file a motion that

ex p lained how ex actly

it wanted to proceed (file a new record or rely on some or all of the

ex isting , flawed record). I n accordance with the court’s directive, defendant filed a motion to supplement the administrative record. I t requested that the record be supplemented with the documents attached to its response to plaintiff’s second motion to supplement the administrative record and the appendix

attached to its response to the show cause order, 7 and stated that Ms. Thomas, who replaced Ms. Nero as the responsible contracting officer, would review the documents and certify the record. Defendant further proposed that none of the ex isting documents, including the inaccurate, backdated document, be removed from the record.

E. P laintif

f ’s Response to Def

endant’s F ilings

I n two filing s on April 18, 2014, plaintiff addressed defendant’s (1) response to its second motion to supplement the administrative record, (2) response to the show cause order, and (3) motion to supplement the administrative record. I n the first filing , a memorandum, plaintiff stated that it opposed the supplementation of the administrative record with the declarations of Ms. Nero, Ms. Thomas, and Dr. Drake, but requested that if the court allowed these declarations to be included in the record, that it be permitted to depose the declarants reg arding their statements and then supplement the record with all or portions of the deposition transcripts, as well as to conduct limited, related discovery . Plaintiff also requested that the court strike the inaccurate, backdated document from the record.

I n its second filing
, a motion for sanctions under RCF C 11(c)(2), plaintiff contended that defendant violated RCF C 11(b) in two way s. F irst, it averred that defendant failed to make a reasonable inquiry

reg arding the effect of sequestration on the EPA’s decision not to pursue a new soil remediation contract. Specifically , it noted that from J uly 9, 2013, forward, defendant maintained the position that sequestration affected the procurement decision, even thoug h plaintiff repeatedly

contended in its own filing s that sequestration was irrelevant. I ndeed,

7 The documents attached to defendant’s response to plaintiff’s second motion to supplement the administrative record also appear in the appendix attached to defendant’s response to the show cause order. See App. 4, 27-28.

- 14-plaintiff advanced this arg u ment in its September 9, 2013 opposition to defendant’s renewed motion to dismiss, its November 4, 2013 proposed amended complaint, its November 25, 2013 reply in support of its motion to amend its complaint, and its December 20, 2013 supplemental complaint. The first of these submissions is of particular importance. I n its September 9, 2013 opposition, plaintiff stated:

[ I ] t appears that EPA’s sug g estion in its J u ly 9 2013 Notice that “sequestration” is forcingit to pursue this new contracting strateg y is simply a pretex t. Defendant never planned to fund the canceled procurement from current y ear appropriations, but instead from a several hundred million dollar bankruptcy settlement now held in a “Superfund Trust” owned and manag ed by EPA. EPA’s website ex plains that the “Residual Sites Settlement Ag reement” resolved claims between EPA and a manufacturing

interest known as “ASARCO” pertaining to cleanup costs associated with Superfund sites in, among other places, Omaha, Nebraska. The website announces that $186,500,000 is available to fund cleanup of the “Omaha L ead Superfund Site,” described as covering “most of the eastern portion of metropolitan Omaha, Nebraska” near the former location of ASARCO’s lead smelter and refinery . EPA’s intention to fund the cancelled procurement from the amounts received in settlement from ASARCO, now held in the “Superfund Trust,” is confirmed in the Solicitation as follows:

The cleanup of residential properties at the OL S (e.g ., the “Omaha L e ad Site”) is being funded from the Superfund Trust under the Comprehensive Environmental Response, Compensation, and L iability Act of 1980, as amended . . . .

Tab 02, AR 103 (emphasis . . . supplied). Since the funding for this procurement
was never g oing to be drawn from current y ear cong ressional appropriations, sequestration could not have affected it.

Pl.’s Opp’n 16-17 (footnote omitted). Plaintiff attached to its brief a copy of the pag e from the EPA’s website describing the ASARCO bankruptcy settlement, which indicated that as a result of the settlement, “[ o] ver $186 million ($219,451,414 with interest) [ w ould] be deposited into an EPA special account for cleanup” of the OL S. Pl.’s Opp’n Attach. A at 1.

Second, plaintiff averred that defendant violated RCF C 11(b) by failing to make a reasonable inquiry

reg arding the inaccurate, backdated document, arg uing that parag raph 19(a) of the document facially

contradicted defendant’s earlier statements to the court reg a rding the imminence of a new solicitation, and that reliance on a contracting officer’s certification was not sufficient to satisfy

RCF C 11(b)’s oblig ations.

B a sed on defendant’s purported violations of RCF C 11(b), plaintiff requested that it be reimbursed for the attorney ’s fees and ex penses it incurred beg inning from J u ly 9, 2013, the date

- 15-that defendant advanced the EPA’s position that sequestration was the reason for the EPA’s

decision not to issue a new soil remediation contract.

F . Subsequent P roceedings, Orders, and F ilings

The court convened proceeding s on April 24, 2014, to discuss its show cause order, the parties’ motions to supplement the administrative record, and plaintiff’s motion for sanctions. 8 L ater that day , the court issued an order indicating that the supplemental administrative record would remain on the court’s docket, but forbidding the parties from rely ing on its contents during further proceeding s on the merits of the protest. I nstead, the court directed defendant to compile a new, corrected administrative record that was to include the contemporaneous documentation of the EPA’s decisions to terminate its contract with PK and not to issue a new soil remediation contract, but was not to include the inaccurate, backdated document or the declarations included in the appendix attached to defendant’s response to the show cause order. The court then denied the parties’ motions to supplement the administrative record as moot. I n a separate order, the court set forth a schedule for briefing on the court’s inherent power to impose sanctions, a topic that had arisen during

the proceeding s.

Defendant subsequently filed a response to plaintiff’s motion for sanctions, arg u ing that the motion should be denied because plaintiff did not comply with RCF C 11(c)(2), which requires that a motion for sanctions be served on the opposing party at least twenty

- one day s before it is filed with the court; because it was entitled to the protection of the rule’s safe harbor provision; and because it did not violate RCF C 11(b). Two weeks later, defendant filed the corrected administrative record.

Plaintiff then filed a notice that it was voluntarily withdrawing its motion for sanctions. I n its notice, plaintiff indicated that it had served another motion for sanctions on defendant to comply with RCF C 11(c)(2). Plaintiff thereafter filed its second motion for sanctions with the court–twenty -four day s after serving it on defendant. This second motion for sanctions was substantively

identical to plaintiff’s orig inal motion. Responding to this second motion for sanctions, defendant arg

ues that plaintiff did not cure the procedural defects of its orig inal motion, that subsequent events have rendered plaintiff’s motion inapposite, and that plaintiff has not established that defendant violated RCF C 11(b).

8 I n its show cause order, the court ex pressed concern with statements contained in three documents filed by

defendant–the March 11, 2013 motion to dismiss, the J u ly 9, 2013 notice, and the September 23, 2013 reply . [ F ormer defense counsel] sig ned all three documents, a fact that defendant obviously

knew. Nevertheless, defendant did not offer an affidavit or declaration from [ former defense counsel] in response to the show cause order and [ f ormer defense counsel] did not appear at the April 24, 2014 proceeding s. I nstead, Mr. W olak ex plained the basis of [ former defense counsel] ’s statements on [ former defense counsel] ’s behalf. See Def.’s Show Cause Resp. 2-10; Tr. 4-19, 54-58, 65, 67-70.

- 16-The parties also completed briefing on the issue of the court’s inherent power to impose sanctions. I n its memorandum, defendant arg ues that the court is prevented from imposing a monetary sanction on the g overnment using its inherent powers because there has been no waiver of sovereig n immunity . Defendant further contends that the facts of this case do not support an award of monetary

sanctions. Plaintiff, in its memorandum, arg ues that the g overnment has waived sovereig

n immunity

with respect to a sanction of attorney ’s fees and ex p enses and that the facts of this case support such a sanction. B riefingis now complete.

II. LEG AL AUTHORITY F OR SANCTIONS

As reflected above, under the circumstances presented in this case, there are two potential sources of authority under which the court could sanction defendant–RCF C 11(c) and the court’s inherent power to impose sanctions. The court addresses each potential source.

A. RCF C 11

Attorney s are oblig ated to ensure that their filing s are not being presented to the court for an improper purpose, and that the representations in those filing s are factually and leg ally

sound. These oblig ations are enshrined in RCF C 11, which provides:

Representations to the Court. B y presentingto the court a pleading , written motion, or other paper–whether by sig ning , filing , submitting , or later advocating it–an attorney

or unrepresented party c ertifies that to the best of the person’s knowledg e, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay
, or needlessly

increase the cost of litig ation;

(2) the claims, defenses, and other leg al contentions are warranted by ex isting law or by

a nonfrivolous arg

ument for ex tending , modify ing , or reversing ex isting law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically

so identified, will likely

have evidentiary

support after a reasonable opportunity

for further investig a tion or discovery ; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

- 17-RCF C 11(b). RCF C 11 “is aimed at curbing baseless filing s, which abuse the judicial sy stem and burden courts and parties with needless ex pense and delay .” J u din v. United States, 110 F .3d 780, 784 (F ed. Cir. 1997) (citing Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 397-98 (1990)). Thus, to avoid running afoul of RCF C 11, attorney s must eng ag e in a factual and leg al inquiry , reasonable under the circumstances, prior to presenting filing s to the court. RCF C 11(b); accord F e d. R. Civ. P. 11 advisory committee’s note, 1993 Amendments (“F RCP 11 note”) (“The rule continues to require litig ants to ‘stop-and-think’ before initially making leg a l or factual contentions.”); see also Chambers v. NASCO, I n c., 501 U.S. 32, 47 (1991) (noting that Rule 11 “imposes an objective standard of reasonable inquiry which does not mandate a finding of bad faith”).

Parties who are alleg e d to have violated RCF C 11(b) must be provided with notice of the possible violation and an opportunity to be heard before sanctions are imposed. RCF C 11(c)(1). I f, after such notice and opportunity to respond, the court determines that a party has violated RCF C 11(b), it may

“impose an appropriate sanction on any attorney , law firm, or party that violated the rule or is responsible for the violation.” RCF C 11(c)(1); accord F RCP 11 note (“The sanction should be imposed on the persons . . . who have violated the rule or may be determined to be responsible for the violation.”). Any sanction imposed by

the court “must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.” RCF C 11(c)(4); accord F RCP 11 note (“[ T] he sanctions should not be more severe than reasonably

necessary

to deter repetition of the conduct by the offending

person or comparable conduct by

similarly situated persons.”). Sanctions “may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing pay ment to the movant of part or all of the reasonable attorney ’s fees and other ex penses directly r esulting from the violation.” RCF C 11(c)(4). I n determining an appropriate sanction, the court may consider, among

other thing s:

W h ether the improper conduct was willful, or neg lig ent; whether it was part of a pattern of activity , or an isolated event; . . . whether the person has eng ag e d in similar conduct in other litig ation; whether it was intended to injure; what effect it had on the litig ation process in time or ex pense; whether the responsible person is trained in the law; what amount, g iven the financial resources of the responsible person, is needed to deter that person from repetition in the same case; [ and] what amount is needed to deter similar activity by other litig ants[ .]

F RCP 11 note.

The notice and opportunity to respond required by

RCF C 11(c)(1) may

be accomplished in two way s–an order to show cause issued by the court or a motion for sanctions served and filed by an opposing party

.

- 18-1. The Court’s Order to Show Cause

Under RCF C 11(c)(3), a “court may order an attorney , law firm, or party to show cause why conduct specifically

described in the order has not violated RCF C 11(b).” As previously noted, when the court first identified issues with defendant’s filing s, it proceeded under RCF C 11(c)(3) and ordered defendant to show cause why it had not violated RCF C 11(b)(3) by making factual contentions to the court that lacked evidentiary support. I n the course of investig ating the basis for those contentions, defendant discovered that it had filed with the court two problematic documents prepared and sig ned by EPA employ e es–an inaccurate, backdated document contained within the supplemental administrative record and a contracting officer certification that attested to the integ rity of the supplemental administrative record. The court indicated during a status conference that it was troubled by the inclusion of a manufactured document in the supplemental administrative record and noted that it would entertain a request for sanctions from plaintiff. Defendant subsequently addressed the inaccurate, backdated document and the problematic contracting

officer certification in its response to the show cause order. According ly , althoug h these two tainted documents were not the subject of the show cause order, the court possesses the authority to sanction conduct related to those documents under RCF C 11(c) because defendant had the required notice and an opportunity to address the preparation and filing of those documents. Available sanctions include nonmonetary directives or penalties paid to the court, but ex clude attorney ’s fees and ex penses.

2 . P laintif

f ’s Motions f

or Sanctions

The necessary

notice and opportunity

to respond may also be initiated by a party

. Specifically , if a party

believes that an opponent violated RCF C 11(b) and should be sanctioned as a result, it may

prepare a motion “describ[ ing ] the specific conduct that alleg edly violates RCF C 11(b)” and serve that m otion on its opponent. RCF C 11(c)(2). After twenty -one day s, the party may file the motion with the court, but only if its opponent has not “withdrawn or appropriately

corrected” the alleg ed violation. I d . The service requirement in this safe harbor provision is strictly

construed. See, e.g ., I slamic Shura Council of S. Cal. v. F B I
, 725 F .3d 1012, 1014 (9th Cir. 2013) (stating that a motion for sanctions may not be filed absent strict compliance with the service requirement of the safe harbor provision); Star Mark Mg mt., I nc. v. Koon Chun Hing Kee Soy & Sauce F actory , L td., 682 F .3d 170, 175 (2d Cir. 2012) (holding that an “informal warning

in the form of a letter without service of a separate Rule 11 motion is not sufficient to trig g er the 21-day safe harbor period”); Gordon v. Unifund CCR Partn ers, 345 F .3d 1028, 1030 (8th Cir. 2003) (holding that it is an abuse of discretion for a district court to g rant a request for sanctions when a motion for sanctions was not previously served on the opposing party ); Photocircuits Corp. v. Marathon Ag ents, I nc., 162 F .R.D. 449, 452 (E.D.N.Y. 1995) (rejecting the defendants’ contention that they were not bound by

the requirements of the safe harbor provision because the court g ranted them leave to file a motion for sanctions if they chose to do so, and rejecting the defendants’ additional contention that the safe harbor provision was inapplicable because plaintiff had more than twenty -one day s to take corrective action).

- 19-I n its initial motion for sanctions, plaintiff contended that defendant violated RCF C 11(b)

by failing to make a reasonable inquiry reg arding the effect of sequestration on the EPA’s decision not to pursue a new soil remediation contract and by failing to make a reasonable inquiry reg arding the inaccurate, backdated document. However, plaintiff did not serve this motion on defendant twenty

- one day s before filing it with the court, as required by RCF C 11(c)(2). The motion was, therefore, procedurally defective. Recog

niz ing this fact, plaintiff withdrew its initial motion and served defendant with a substantively identical motion. Then, more than twenty -one day s after serving the second motion on defendant, plaintiff filed the motion with the court.

Defendant contends that plaintiff’s second motion for sanctions was improper because defendant had “appropriately corrected” the purported violations of RCF C 11(b) identified by plaintiff prior to plaintiff filing the motion with the court. These “appropriate[ ] correct[ ions] ,” asserts defendant, were the ex p lanations it provided in its response to the order to show cause and during the April 24, 2014 proceeding s. Defendant arg ues that plaintiff, in its motion for sanctions, was required to address why defendant’s ex

planations did not address plaintiff’s concerns. Defendant is mistaken. All that is required by RCF C 11(c)(3) is that plaintiff “describe the specific conduct that alleg e dly violates RCF C 11(b)” that had not been “withdrawn or appropriately

corrected . . . .” I f plaintiff believed that violations of RCF C 11(b) continued to

ex ist after serving its motion for sanctions on defendant, it was permitted to file the motion with the court. I t is then for the court to decide whether defendant “appropriately corrected” the purported violations.

Defendant also arg

ues that there is no basis for the second alleg ed violation of RCF C 11(b) identified by plaintiff–defendant’s purported failure to make a reasonable inquiry reg arding the inaccurate, backdated document–because it complied with the court’s order directing it to file a corrected administrative record without the offending document before plaintiff filed its motion for sanctions. F rom defendant’s perspective, its compliance with the court’s order satisfies the requirements of RCF C 11(c)(2)’s safe harbor provision. Defendant is incorrect. F irst, defendant has not withdrawn the inaccurate, backdated document. Althoug h the court directed defendant to file a corrected administrative record that did not contain the inaccurate, backdated document, it noted that the corrected administrative record was to be used as the basis for further proceeding s on the merits, and ex pressly stated that the supplemental administrative record containing the inaccurate, backdated document would remain on the docket. At no point has defendant moved to strike or withdraw the inaccurate, backdated document from the court’s docket. I ndeed, in its motion to supplement the administrative record, defendant ex plicitly proposed that the inaccurate, backdated document remain in the record. Second, common sense dictates that the filing of a manufactured document in an administrative record can be “appropriately corrected” only by moving to withdraw or strike that document from the administrative record; merely providing ex planations reg arding how and why the document was manufactured is insufficient. According ly , defendant’s failure to seek the removal of the document from the supplemental administrative record forecloses its ability to invoke RCF C 11(c)(2)’s safe harbor provision.

- 20-I n sum, the court concludes that it possesses the authority to provide the relief requested

by plaintiff in its motion for sanctions–i.e., attorney ’s fees and ex penses–so long as the relevant violations of RCF C 11(b) are established.

B. Inherent P ow er
The court may

also sanction misconduct under its inherent power to manag e its affairs and ensure that the judicial process is not abused. See Chambers, 501 U.S. at 43-46, 50; Roadway Ex press, I nc. v. Piper, 447 U.S. 752, 765 (1980); F RCP 11 note (“[ Rule 11] does not inhibit the court . . . in ex ercising its inherent powers, or in imposing sanctions . . . .”); see also United Med. Supply

Co. v. United States, 77 F ed. Cl. 257, 264 & n.6 (2007) (ex plaining that the Court of F ederal Claims is vested with this inherent power). However, the court’s authority to sanction misconduct under its inherent power is not without limits. Due to the broad scope of its inherent power, the court must ex ercise caution and restraint when invoking it to impose a sanction. Chambers, 501 U.S. at 44, 50; Roadway Ex press, Inc., 447 U.S. at 764. And, when considering the imposition of such a sanction, the court must “comply with the mandates of due process . . . .” Chambers, 501 U.S. at 50. I n other words, the court must provide the party facing the possibility

of a sanction with notice and an opportunity to respond. Roadway

Ex press, Inc., 447 U.S. at 767.

Another limit to the court’s inherent power to sanction is unique to cases where the United States is the party facing sanctions. I n such cases, courts are prohibited from using their inherent power to impose monetary sanctions. This prohibition is derived from the United States’ sovereig n immunity . See United States v. Sherwood, 312 U.S. 584, 586 (1941) (“The United States, as sovereig n, is immune from suit save as it consents to be sued.”). A waiver of sovereig n immunity

“cannot be implied but must be unequivocally ex pressed.” United States v. King , 395 U.S. 1, 4 (1969). B ecause a court’s inherent authority to impose sanctions is not, and by definition cannot be, unequivocally ex pressed in statutory

tex t, it cannot provide the basis for imposing monetary

sanctions ag ainst the United States. See Tippett v. United States, 98 F ed. Cl. 171, 181 (2011) (“[ T] he court cannot consider its inherent powers alone to be sufficient to overcome the sovereig

n immunity

protecting the United States from claims for monetary contempt sanctions or litig ation ex penses.”); see also Yancheng B aolong B iochem. Prods. Co. v. United States, 406 F .3d 1377, 1383 (F ed. Cir. 2005) (“The g overnment’s submission to the jurisdiction of the court alone is not sufficient to supply a waiver of sovereig

n immunity

for the sanctions the court soug ht to impose.”). According ly
, to the ex tent that monetary sanctions are appropriate in this case, they must be imposed under RCF C 11(c)(4), and not by means of the court’s inherent powers.

- 21-III. DEF ENDANT’S CONDUCT

A. Def e ndant Engaged in Sanctionable Conduct

The court has identified five areas of concern for which sanctions could be appropriate: (1) the compilation of the supplemental administrative record; (2) the lack of evidentiary support in the supplemental administrative record for defendant’s representation to the court that the EPA intended to issue a new or revised solicitation in the near future; (3) the lack of evidentiary support in the supplemental administrative record for defendant’s representation to the court that sequestration play ed a role in the EPA’s decision not to issue a new contract for soil remediation services; (4) the inclusion of an inaccurate, backdated document as part of the supplemental administrative record; and (5) the certification of the supplemental administrative record that included an inaccurate, backdated document. I n this section, the court describes the conduct at issue and indicates whether it will sanction that conduct. I n the section that then follows, the court discusses the appropriate sanctions.

1. Specif ic Issues Raised in the Show Cause Order

a. Com pilation of

the Supplem ental Adm inistrative Record

I n its show cause order, the court directed defendant to demonstrate its compliance with RCF C 11(b)(3), which requires that “factual contentions have evidentiary support or, if specifically

so identified, will likely

have evidentiary

support after a reasonable opportunity for further investig ation or discovery [ .] ” Specifically , the court directed defendant to ex p lain the evidentiary

basis for the statements at issue and to provide supporting citations to the administrative record. I

n its response to the show cause order, defendant ex plained that it could not provide supporting citations to the administrative record because the EPA did not memorializ e the decisions reg arding whether and when to issue a solicitation for a new soil remediation contract “in documents that would be included in a bid protest administrative record.” Def.’s Show Cause Resp. 2-3. The court is baffled by this assertion.

Defendant’s compilation of the supplemental administrative record was necessitated by plaintiff’s filing of a supplemental complaint. I n its supplemental complaint, plaintiff challeng ed the EPA’s decision to cancel the orig inal procurement and the EPA’s subsequent decision not to pursue a new contract for soil remediation services after indicating , via representations to the court, that it would be issuing a new solicitation to which plaintiff could respond. According ly
, to adequately

address plaintiff’s protest alleg ations, the supplemental administrative record should have included all of the documents relevant to the EPA’s decision to cancel the orig inal procurement and subsequent decision not to pursue a new soil remediation contract, including documents pertainingto the EPA’s termination of its contract with PK and documentation of the role that sequestration play ed in its ultimate decision. See RCF C 52.1(a) (ex p laining that an administrative record contains the record of relevant proceeding s before an ag ency

); Smith v. United States, 114 F ed. Cl. 691, 694 (2014) (“The administrative record to be considered by a

- 22-reviewing

court shall include all the materials compiled by the ag ency

before it made its decision.”); Cubic Applications, I n c. v. United States, 37 F e d. Cl. 345, 349-50 (1997) (“[ T] he primary focus of the court’s review should be the materials that were before the ag ency when it made its final decision.”); see also Tauri Grp., L L C v. United States, 99 F ed. Cl. 475, 480-81 (2011) (noting that a request to supplement the administrative record with documents created during an ag ency ’s evaluation process is “a question of completing the administrative record, rather than supplementing it,” and that the court’s review of an ag ency ’s decision is to be based on “what the ag ency

did in reaching

its decision, not what [ the ag ency ] chooses to assemble after a protest is lodg ed”); Orion I nt’l Techs. v. United States, 60 F ed. Cl. 338, 344 (2004) (noting that an administrative record may be insufficient if it lacks “information relied upon” by the ag ency

); Murakami v. United States, 46 F ed. Cl. 731, 735 n. 4 (2000) (sug g esting that “evidence that the
ag ency considered but did not include in the record” should have been included in the administrative record filed with the court), aff’d, 398 F .3d 1342 (F ed. Cir. 2005). To the ex tent that the EPA lacked formal documentation of the decisions it made that are relevant to this protest, as defendant contends, defendant should have soug h t to include in the administrative record informal documentation, such as handwritten notes or intra-ag e ncy communications, of the EPA’s decision-making process. See L

y on Shipy ard, I

nc. v. United States, 113 F ed. Cl. 347, 353 n.3 (2013) (reflecting that the court directed the g overnment to supplement the administrative record with electronic-mail messag es relatingto the evaluation of the protestor’s proposal); Mont. F ish, W ildlife, & Parks F ound., I n c. v. United States, 91 F ed. Cl. 434, 445-46 (2010) (“I nformation the contracting officers acquired, even if by informal means such as oral conversations, which was available at the time the decision was made . . . , should be reflected in the administrative record.”); cf. Gulf Grp., I nc. v. United States, 61 F ed. Cl. 338, 347 (2004) (noting that the court did not permit discovery of internal ag ency

communications because “the record already

contained the final determinations of the relevant decisionmakers and the contemporaneous reasons they g ave in support of [ their] decisions”).

I ndeed, as reflected by

the appendix submitted by defendant with its response to the show cause order, informal documentation of the EPA’s decision-making process ex isted. Nevertheless, despite the alleg ations in plaintiff’s supplemental complaint and the need for the court to have an adequate record to review the merits of plaintiff’s protest, defendant did not include any

of this informal documentation in the supplemental administrative record. Thus, the record before the court lacked any documentation supporting (1) defendant’s previous assertion that as of March 11, 2013, the EPA intended to issue a new or revised solicitation in the near future or (2) defendant’s previous assertion, challeng ed by plaintiff, that sequestration affected the EPA’s decision not to issue a new soil remediation contract. F o r defendant to now imply

that the informal documentation reflecting the bases for the EPA’s decisions could not or should not have been included in the supplemental administrative record, is, at best, misg uided.

Moreover, it bears noting that a party ’s oblig ation under RCF C 11(b)(3) to ensure that “factual contentions have evidentiary support” may

be different in a bid protest than it would be in other cases. The only

evidence that a court may consider in a bid protest is the evidence contained in the administrative record. See Ax iom Res. Mg mt., I nc. v. United States, 564 F .3d

- 23-1374, 1381 (F ed. Cir. 2009) (“The focus of judicial review of agency action remains the administrative record . . . .”). This sug g ests that the “evidentiary support” for factual contentions made by the g o vernment in a bid protest reg arding an ag ency ’s decision-makingprocess should be contained within the administrative record filed with the court. Here, the administrative record, as supplemented, did not contain documentation supporting defendant’s factual contentions that the EPA intended to issue a new or revised solicitation in the near future and that sequestration play ed a role in the EPA’s decision not to solicit a new contract for soil remediation services. And, defendant did not seek to supplement the administrative record with such information until April 11, 2014, more than nine and twelve months, respectively , after it made its factual contentions.

Despite the court’s concerns with defendant’s failure to include the necessary evidentiary support in the supplemental administrative record and defendant’s ex tended delay

in seeking to further supplement the administrative record with the relevant evidentiary support, the court will not impose any sanctions for this conduct because defendant has included the relevant documents in the corrected administrative record. However, in future bid protests, defendant shall take due care to ensure that the factual representations it makes to the court have evidentiary support in the administrative record.

b. The EP A ’s Intent to Issue a New Solicitation in the Near F uture

As described above, defendant represented in its March 11, 2013 motion to dismiss that the EPA intended to issue a new or revised solicitation in the near future, but the supplemental administrative record did not include any support for that statement. W ith its response to the show cause order, defendant produced ex trarecord documentation reflecting that, as of March 11, 2013, the EPA did intend to issue a new or revised solicitation in the near future, and that the EPA chang ed course after defendant filed its motion to dismiss. Defendant should have included this ex trarecord documentation in the supplemental administrative record. However, as noted above, because defendant has included this documentation in the corrected administrative record, the court will not impose sanctions for a violation of RCF C 11(b)(3).

c . The Ef

f ect of Sequestration on the EP A’s Decision Not to Solicit a NewContract

The other problematic factual contentions identified by the court in the show cause order concerned the effect of sequestration on the EPA’s decision not to pursue a new contract for soil remediation services. I

n both its J uly

9, 2013 notice and its September 23, 2013 reply in support of its renewed motion to dismiss, defendant asserted that the EPA’s decision was the result of the sig nificant budg et constraints caused by sequestration. However, the supplemental administrative record did not include any support for that contention.

W ith respect to its J uly

9, 2013 representation to the court, defendant produced

ex trarecord documentation with its response to the show cause order reflecting that the EPA had advised [ former defense counsel] on J uly 8, 2013, that sequestration was a basis for the decision

- 24-not to issue a new soil remediation contract. B ecause the proffered documentation consists of

electronic-mail messag es between EPA employ ees and counsel, it was appropriate for defendant to withhold them from the supplemental administrative record. Nevertheless, defendant has included these messag es in the corrected administrative record. And, there is nothing in the
messag es indicating that [ f ormer defense counsel] did not eng ag e in a reasonable inquiry under the circumstances in violation of RCF C 11(b)(3). Thus, the court declines to sanction defendant for the J uly

9, 2013 representation to the court.

The circumstances surrounding defendant’s second representation reg arding sequestration are somewhat different. I n its September 9, 2013 opposition to defendant’s renewed motion to dismiss, plaintiff contended that sequestration could not have affected the EPA’s decision not to issue a new contract because fundingfor the soil remediation work was not derived from currenty ear appropriations. I

n support of this contention, plaintiff provided documentation–a quotation from the invitation for bids included in the orig inal administrative record and a copy of a pag e from the EPA’s website–that funding for the work came from a bankruptcy settlement fund held in the “Superfund Trust.” I n its September 23, 2013 reply , defendant responded to plaintiff’s contentions as follows:

[ Plaintiff] ig nores basic principles of economics and log ic. EPA has a finite amount of money

to spend. That amount is markedly less as a result of sequestration. Every

dollar out of the Superfund or appropriated funds[ ] is one dollar that it does not have to spend elsewhere. L ong

- term sequestration has forced EPA to take a hard look at its budg et. I t has determined that it can save
money by satisfy ing its lead remediation needs under . . . ex isting contracts. The decision to do so was not irrational. [ Plaintiff] sug g ests no authority sug g esting that it was.

Def.’s Reply

11. I n other words, despite the information contained in the invitation for bids and on the EPA’s website reg arding the funding source for the soil remediation work, defendant did not retract its assertion that sequestration was the basis for the EPA’s decision. Moreover, defendant sug g ested that the funds from the Superfund Trust and other appropriated funds are fung ible, and that, therefore, an y saving s realiz ed by not spending funds from the Superfund Trust could be used to obtain g oods or services that were normally paid for using other appropriated funds.

Defendant’s response to plaintiff’s sequestration-related averments is hig hly problematic under RCF C 11(b). [ F ormer defense counsel] did not cite any evidentiary

or leg al support for the contention that funds from the Superfund Trust and other appropriated funds are fung ible. I n relying instead on “basic principles of economics and log ic,” id., [ former defense counsel] effectively

ig nored the evidence in the administrative record and the documentation supplied by plaintiff, all available to him prior to the filingof the reply brief, that implied just the opposite–that the funds from the Superfund Trust set aside for the OL S could only be used to remediate the soil at the OL S. I ndeed, when later asked about this specific issue, Dr. Drake

- 25-confirmed that there are no budg et constraints for the soil remediation work at the OL S because

that work is fully funded from a special, dedicated account. Thus, based on these facts alone, the court has no option but to conclude that [ former defense counsel] did not investig a te plaintiff’s sequestration-related averments before filing defendant’s September 23, 2013 reply

. The court’s conclusion is buttressed by the fact that the record before it is bereft of any documentation reflecting

that defendant conducted an investig ation reg arding plaintiff’s sequestration-related averments. Specifically , there is no indication that [ former defense counsel] performed his own investig ation reg arding the discrepancy between the information in the J uly 9, 2013 notice on one hand and the invitation for bids and the EPA website on the other hand; there is no indication that [ former defense counsel] asked [ ag ency counsel] to investig ate the discrepancy ; and, if [ ag ency counsel] was aware of the contents of plaintiff’s response brief, there is no indication that [ ag ency counsel] initiated an investig ation of the discrepancy . These lapses are inex plicable–plaintiff had not advanced a wild, unsubstantiated arg ument. Rather, plaintiff made a factual contention supported by evidence from both within, and outside of, the administrative record. The contents of plaintiff’s response brief should have prompted further inquiry by [ former defense counsel] –he should have pressed his client to square its advice that sequestration had an impact on its ability to proceed with the soil remediation work with the information contained in the invitation for bids and on the EPA’s website. Therefore, defendant’s September 23, 2013 contention reg arding the role of sequestration in the EPA’s decision violates RCF C 11(b)’s requirement that factual contentions be made after “an inquiry reasonable under the circumstances[ .] ”

Defendant’s arg

uments to the contrary

fall short. According

to defendant, [ former defense counsel] was entitled to rely on the information supplied by [ a g ency counsel] in J uly 2013 that was ultimately obtained from Ms. Thomas and Dr. Drake. Defendant ex plained that this reliance is justified by the fact that Ms. Thomas truly understood that sequestration was the reason for the EPA’s decision not to pursue a new soil remediation contract, especially in lig ht of Dr. Drake’s confirmation of this understanding and the g uidance that she had been receiving from her superiors at the EPA reg a r ding the effect of sequestration on EPA contracts. However, Ms. Thomas’s understanding in J uly 2013 has no bearing

on defendant’s oblig ation, when confronted with conflicting evidence two months later, to eng ag e in further inquiry

. 9

9 Nevertheless, it bears noting that as the Acquisition Section Chief for EPA Reg ion 7, Ms. Thomas presumably

has oversig ht over all of the contracts issued in her reg ion and, therefore, it stands to reason that Ms. Thomas would be familiar with the funding sources for each of these contracts. Moreover, as noted by plaintiff, during the relevant time period, the funding source for the work being performed at the OL S was identified on the EPA’s publicly available website. According ly , it seems fair to assume that even if she had not read the invitation for bids for the soil remediation contract ultimately awarded to PK, Ms. Thomas would know that the work at issue was being funded from the Superfund Trust, and not from other appropriated funds. However, there is no actual evidence before the court indicating that Ms. Thomas possessed this knowledg e. See, e.g ., AR 2-121 (containingthe invitation for bids, which

- 26-Moreover, defendant’s arg ument that sequestration did, in fact, play a role in the EPA’s decision not to issue a new soil remediation contract, as reflected by the documentation it submitted in the appendix attached to its response to the show cause order, is not persuasive. The documentation relied upon by defendant reflects that all of the EPA’s components were under a mandate to decrease contract-related costs to accommodate the decrease in funding trig g ered by

sequestration. However, with respect to the soil remediation services at issue in this protest, defendant’s proffered documentation reflects that the EPA was continuously monitoring the number of properties that required remediation, and that sometime in May 2013, it had determined that a new soil remediation contract was unnecessarydue to the lower-thananticipated number of properties requiring remediation. In other words, it was the scope of the remaining work, and not fundingfor that work, that dictated the EPA’s decision.

Ultimately , there is no evidence before the court indicating that the EPA chose not to solicit a new soil remediation contract for the OL S due to sequestration. Had defendant launched the inquiry

mandated by

RCF C 11(b) when plaintiff presented it with credible ev idence in conflict with its J uly

9, 2013 representation to the court, it would have discovered this fact and, presumably , the incorrect factual contention reg arding sequestration would not have appeared in its September 23, 2013 reply in support of its renewed motion to dismiss. Defendant’s failure to investig ate the effect of sequestration on the EPA’s decision not to solicit a new soil remediation contract constitutes sanctionable conduct. However, upon careful reflection, the court declines to impose a sanction. Rather, it is confident that the foreg oing discussion will be sufficient to deter further similar conduct by defendant and its leg al representatives.

2. The Inaccurate, Backdated Docum ent, and Its Inclusion in the Supplem ental

Adm inistrative Record F iled With the Court

The final two, and most serious, areas of concern identified by the court relate to the inclusion of an inaccurate, backdated document in the supplemental administrative record and the subsequent certification of that record by the EPA. The information included in the appendix attached to defendant’s response to the show cause order reveals the following course of events. I n early J a nuary 2014, [ ag ency

counsel] advised Ms. Thomas that a supplemental administrative record addressing

the new claim in plaintiff’s supplemental complaint needed to be compiled. This information was subsequently passed on to Ms. Nero. I n reviewing

her files, Ms. Nero realiz e d that she did not prepare a Determination and F inding s document in March 2013 when the EPA terminated its contract with PK. Rather than admitting that she did not prepare the document required by

Ms. Thomas, she attempted to cure her oversig ht by preparing , after consultation with Ms. Thomas, a draft Determination and F inding s document. Parag raph 19 of the draft document indicated that the reasons for the EPA’s termination of the contract with PK

does not contain any reference to Ms. Thomas), App. 115-16 (containing a memorandum that was sent to EPA prog r am offices, and not contracting offices, confirming

that Superfund remediation work was mission critical). Thus, the court will not attribute actual knowledg e to her.

- 27-were (1) the costs being incurred by PK and, inaccurately , (2) that the EPA’s soil remediation needs at the OL S could be satisfied under ex isting contracts. Ms. Nero forwarded the draft to Ms. Thomas on J a

nuary 6, 2014. Ms. Thomas responded the following morning , recommending that Ms. Nero reverse the order of the two subparag raphs under parag

raph 19 to reflect, inaccurately
, that the primary reason for the termination was the EPA’s ability to satisfy its soil remediation needs at the OL S throug h ex isting contracts. Ms. Nero made the sug g ested chang e and then sig ned and dated the document. I nstead of hand-writing

the then-current date–J anuary 7, 2014–on the document, Ms. Nero backdated the document to March 11, 2013, which was consistent with what was ty p ewritten in parag

raph 19. This inaccurate, backdated document was then included in the supplemental administrative record, which Ms. Nero forwarded to counsel. 1 0 On J anuary

31, 2014, due to Ms. Nero’s absence from the office, Ms. Thomas was asked to review and certify

the supplemental administrative record. Contrary to the lang uag e of the certification she sig ned, Ms. Thomas did not review the record; she merely assumed that the record was accurate and sig ned the certification. L ater that day , Mr. W olak filed the supplemental administrative record and Ms. Thomas’s certification with the court.

The court draws several conclusions from the foreg oing recitation of events. F irst, by backdatingthe Determination and F inding s document in both parag raph 19 and along side her sig nature, Ms. Nero was attempting to make it appear to any

one who read the document that she prepared and sig

ned the document ten months earlier than she actually did. Ms. Nero knew that the document was g oing to be included in a supplemental administrative record that would be provided to counsel and filed with the court. I t necessarily

follows that by

including the backdated document in the supplemental administrative record, Ms. Nero was intentionally try ing to deceive counsel and the court reg arding the authenticity of the document.

Second, Ms. Thomas’s recommendation that Ms. Nero edit parag raph 19 of the draft Determination and F inding s document demonstrates that Ms. Thomas had read, and understood the contents of, parag

raph 19. B ecause parag

raph 19 clearly indicated that the document had been prepared in March 2013, Ms. Thomas was either (1) knowing ly , and improperly , editing a document that had been prepared in March 2013 or (2) knowing ly participating in the creation of a document in J anuary

2014 that should have been created in March 2013. According ly , Ms. Thomas was complicit in Ms. Nero’s attempt to make it appear to any o ne who read the document that it had been prepared ten months earlier than it was actually prepared. And, like Ms. Nero, Ms. Thomas knew that the document was g oing to be included in a supplemental administrative record that would be provided to counsel and filed with the court. According ly , it follows that by approving the document, Ms. Thomas was intentionally try ing to deceive counsel and the court
reg arding its authenticity

.

1 0 Ms. Thomas states that Ms. Nero forwarded the supplemental administrative record to EPA and DOJ counsel via electronic mail, but the relevant electronic-mail messag es are not part of the record before the court.

- 28-Third, as admitted by Ms. Nero and Ms. Thomas, the backdated Determination and F inding s document contained inaccurate information concerning why the EPA terminated its contract with PK–i.e., that the contract termination was the result of the EPA being able to satisfy its soil remediation needs throug h ex isting contracts. Ms. Nero bears some responsibility for including the erroneous information in the document because she did so without having any documentation indicating that the PK contract was terminated due to the chang e d needs of the EPA. Her responsibility

is not ex cused by

her ex tended absence from the office because, as the contracting

officer and the individual signing the document, she had the oblig ation to ensure the
accuracy of the document’s contents. Ms. Thomas also bears some responsibility for including the erroneous information in the document because she reviewed the document and ex pressly confirmed that the EPA’s chang ed needs was one of the two reasons for the termination of the contract with PK, despite any documentary

support for that reason. Her ex press approval of this erroneous information renders her subsequent ex planation that she “completely missed” it during her review dising enuous, at best.

F ourth, Ms. Thomas falsely represented in her certification of the supplemental administrative record that she carefully reviewed the record and that, as indicated by her careful review, the record constituted the record of the actions taken by the EPA that were relevant to plaintiff’s protest. Ms. Thomas admits in her declaration that she did not review the supplemental administrative record. And, as set forth above, Ms. Thomas knew, or should have known, that the supplemental administrative record contained an inaccurate, backdated document. Moreover, Ms. Thomas ex ecuted the certification with the knowledg e that the supplemental administrative record would be filed with the court.

B a sed on these conclusions, the court finds that Ms. Nero and Ms. Thomas acted in bad faith in preparing

and approving the inaccurate, backdated Determination and F inding s document, and in including that inaccurate, backdated document as part of the supplemental administrative record that they knew would be filed with the court. Moreover, the court finds that Ms. Thomas acted in bad faith by falsely certify ing that she carefully

reviewed the supplemental administrative record and that the record was an accurate representation of the EPA’s actions relevant to the protest.

B. Appropriate Sanctions

As described above, the court has concluded that the following conduct should be sanctioned: (1) Ms. Nero’s and Ms. Thomas’s preparation of an inaccurate, backdated document and their subsequent inclusion of that document in the supplemental administrative record; and (2) Ms. Thomas’s certification of the supplemental administrative record. The court must therefore determine what sanctions are appropriate for this misconduct.

The misconduct of Ms. Nero and Ms. Thomas is sanctionable under both RCF C 11 and the court’s inherent powers. Specifically , a number of federal appeals courts have upheld Rule 11 sanctions ag a inst represented parties who submitted manufactured evidence to the court. See,

- 29-e.g ., J imenez v. Madison Area Tech. Coll., 321 F .3d 652, 655-57 (7th Cir. 2003) (findingno

abuse of discretion in the trial court’s imposition of Rule 11 sanctions ag ainst a represented party who presented fraudulent documents to support the alleg ations in her complaint); Pope v. F ed. Ex press Corp., 974 F .2d 982, 984 (8th Cir. 1992) (finding no abuse of discretion in the trial court’s imposition of Rule 11 sanctions ag a inst a represented party who produced a manufactured document as an ex hibit “with intent to mislead the court”); Combs v. Rockwell I nt’l Corp., 927 F .2d 486, 488 (9th Cir. 1991) (noting that both Rule 11 and the court’s inherent powers can be the basis for sanctions for a represented party ’ s falsification of a deposition, and that “collusion with counsel” was not a prerequisite for such sanctions); see also F raig e v. Am.-Nat’l W a termattress Corp., 996 F

. 2d 295, 296 & n.1 (F ed. Cir. 1993) (remarking that the trial court had imposed Rule 11 sanctions ag ainst the defendant for its president’s submission of false and forg ed documents to the court to bolster the defendant’s opposition to a motion for a preliminary injunction). F ederal appeals courts have also held that the submission of falsified evidence–both documentary

and testimonial–to the court is sanctionable under the court’s inherent powers. See,
e.g ., Oliver v. Gramley , 200 F .3d 465, 466 (7th Cir. 1999) (affirming the district court’s dismissal of a petition for habeas corpus as a sanction for the petitioner’s submission to the court of a perjurious affidavit and a forg ed certificate of service, an action that the appeals court characteriz ed as “criminal in character,” “eg reg ious, inex c usable, and destructive”); Gonz alez v. Trinity Marine Grp., I

nc., 117 F .3d 894, 898-99 (5th Cir. 1997) (affirming the district court’s conclusion that the alteration and fabrication of evidence–an audio recording

– was conduct that could be sanctioned under the court’s inherent powers); TeleVideo Sy s., I nc. v. Heidenthal, 826 F .2d 915, 915-17 (9th Cir. 1987) (per curiam) (affirming the trial court’s imposition of sanctions for the defendant’s perjured deposition testimony , which “qualifie[ d] as a willful deceit of the court”).

The court has concluded that Ms. Nero and Ms. Thomas acted in bad faith when they prepared a Determination and F inding s document, and subsequently included that document in the supplemental administrative record, with the knowledg e that the document was backdated and contained inaccurate information, and with the further knowledg e that the supplemental administrative record would be used in proceeding s in the Court of F e deral Claims. The court has also concluded that Ms. Thomas acted in bad faith by representing

in her certification of the supplemental administrative record that she carefully reviewed the record and that the record constituted the record of the actions taken by the EPA that were relevant to plaintiff’s protest, because she acknowledg ed that she did not review the record and because the record contained an inaccurate, backdated document.

The bad faith conduct of Ms. Nero and Ms. Thomas caused plaintiff’s counsel, defense counsel, and the court to question the integ rity of the administrative record compiled by the EPA. Given that one document was created ten months after the fact for the purposes of litig a tion, could it be that other documents were similarly created for the purposes of litig a tion? Does the false certification of one part of the administrative record call into question the authenticity of the certification of the rest of the administrative record? The resulting investig ation into these questions, and the subsequent efforts to address and resolve the issues raised by that

- 30-investig ation, required the exp e n diture of sig nificant resources–both time and money

– by counsel and the court. These were resources that could have been devoted to addressing the merits of the protest or devoted to work on matters unrelated to this protest. I n sum, there is no question that the actions of Ms. Nero and Ms. Thomas had sig nificant adverse consequences in this protest.

As previously

stated, RCF C 11(c)(4) provides that sanctions are meant to deter future misconduct. Deterrence is particularly important in this case due to the presumption that federal
g overnment contracting

officials perform their duties in g ood faith. See Am-Pro Protective Ag ency , I nc. v. United States, 281 F .3d 1234, 1239 (F ed. Cir. 2002) (holding that a contractor was unable to “overcome the strong presumption that g overnment contract officials ex ercise their duties in g ood faith”); accord U.S. Postal Serv. v. Greg ory , 534 U.S. 1, 10 (2001) (noting that “a presumption of reg

ularity attaches to the actions of Government ag encies”); Schism v. United States, 316 F .3d 1259, 1302 (F ed. Cir. 2002) (en banc) (“This presumption of reg ularity is the supposition that public officers perform their duties correctly , fairly , in g ood faith, and in accordance with law and g overning regulations, and is valid and binding unless ‘well-nig h irrefrag a ble proof rebuts or overcomes it.’” (citation omitted) (quoting Alaska Airlines, I

nc. v. J ohnson, 8 F

. 3d 791, 795 (F ed. Cir. 1993))). That presumption is overcome when contracting officials take actions similar to those taken by Ms. Nero and Ms. Thomas in this case, i.e., preparing a backdated, inaccurate document; including that document in the supplemental administrative record; and then certify ing the integ rity

of the record. One of the court’s g oals in sanctioning the bad faith conduct of the contracting officer and her supervisor in this case is to deter further similar misconduct by contracting

officials.

B a sed on the severity

of Ms. Nero’s and Ms. Thomas’s misconduct, the court concludes that under RCF C 11(c)(4), the EPA should reimburse plaintiff for the reasonable attorney ’s fees and ex p enses it incurred to address that conduct, beg inning on March 6, 2014, the date that Mr. W o lak advised plaintiff’s counsel that there mig ht be an issue with the Determination and F inding s document, and ending on J une 12, 2014, the date that plaintiff filed its brief reg arding the court’s inherent power to impose sanctions. 1 1 I n addition, due to the resources ex pended by the court in addressing

the issues raised by

the inaccurate, backdated document and false certification that defendant filed with the court, the court concludes that, as permitted by RCF C 11(c)(4), the EPA should pay a monetary

penalty to the court of $1,000. These sanctions are the least severe sanctions that would deter further similar misconduct by Ms. Nero, Ms. Thomas, other EPA personnel, and other contracting officials.

IV. CONCLUSION

F or the reasons set forth above, the court concludes that (1) Ms. Nero’s and Ms. Thomas’s bad faith preparation of an inaccurate, backdated document that they subsequently included, in bad faith, in the supplemental administrative record; and (2) Ms. Thomas’s bad faith

1 1 This award does not include the attorney ’s fees and costs that plaintiff incurred in preparing and filing its procedurally deficient motion for sanctions.

- 31-certification of the supplemental administrative record should be sanctioned. I t therefore G RANTS IN P ART plaintiff’s second motion for sanctions and imposes the following sanctions:

• The EPA shall reimburse plaintiff for the reasonable attorney ’s fees and costs it incurred, from March 6, 2014, to J une 12, 2014, in addressing the bad faith conduct concerning

the inaccurate, backdated Determination and F inding s document and the falsified certification of the supplemental administrative record.

• The EPA shall pay

a penalty to the court of $1,000.

Plaintiff shall prepare a statement of the attorney ’s fees and costs that it believes should be reimbursed and then, by no later than F riday, Septem ber 5, 2014 , file the statement, along with
any necessary

ex planation or supporting documentation, with the court. Defendant shall then file
any objections to the reasonableness or accuracy of plaintiff’s claimed attorney ’s fees and costs by no later than F riday, Septem ber 19, 2014 . I n addition, the EPA shall pay its penalty

to the court by no later than F riday, October 3, 2014 . The pay ment shall be made by certified or cashier’s check made pay able to “Clerk, U.S. Court of F ederal Claims.”

The court has filed this ruling under seal. The parties shall confer to determine ag reed-to proposed redactions. Then, by no later than F riday, August 22, 2014 , 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.

IT IS SO ORDERED.

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

- 32-