Opinion ID: 208807
Heading Depth: 3
Heading Rank: 2

Heading: The Court of Federal Claims' Decision on the Merits

Text: Appellants next argue that the Court of Federal Claims' determination that Lockheed's mitigation plan did not adequately resolve the alleged OCI is contrary to the record before the CO. The court decided that the CO abused his discretion in violation of FAR § 9.5 by awarding the Task Order to Lockheed Martin, without developing a mitigation plan that does not afford Lockheed Martin any significant competitive advantages, [4] is enforceable, i.e., subject to court order, and otherwise does not impose any anticompetitive effects on future competition. Id. at 600. Because the antitrust concerns were originally raised by the trial court and are not relied upon by Axiom in this appeal, we will limit our review to the adequacy and enforceability of the mitigation plan. In its discussion of the adequacy of Lockheed's mitigation plan, the Court of Federal Claims relied heavily on two expert witness declarations that the court permitted Axiom to add to the record. See Axiom I, 78 Fed.Cl. at 596-98. The first declaration, that of Nancy Adams, a former Senior Advisor to the Director of TMA, expressed the opinion that it would be impossible for Lockheed to prevent information relevant to its Category 2 contracts from reaching its employees who were working on its Category 3 contracts. Id. at 596-97. Accordingly, Ms. Adams believed that Lockheed's mitigation plan could not adequately resolve all OCIs. Id. In the second declaration, Ronald Richards, who was formerly TMA's Chief of the Central Operations Office, stated his belief that the Category 2 work would provide Lockheed with information that could give Lockheed an unfair competitive advantage when bidding for future purchased care and Category 3 non-purchased care contracts. Id. at 597-98. As discussed previously, supplementation of the administrative record is only appropriate in limited circumstances. Because we have not been presented with any persuasive explanation of why the record before the CO precluded effective judicial review in this case, we do not find the court's reliance on the Richards and Adams declarations well placed. However, even if we were to give some weight to these declarations, they do not end the inquiry. After all, a decision is not necessarily unreasonable simply because the disappointed bidder is able to find two witnesses who disagree with it. Notwithstanding the contrary opinions of Axiom's declarants, we conclude that the CO's decision to award the contract to Lockheed was not arbitrary or capricious. Mindful of the confidential nature of Lockheed's mitigation efforts, we note that the CO and TMA reviewed the OCI Mitigation Plan and comparative analysis submitted by Lockheed and determined that the processes and procedures described therein would be sufficient to mitigate the alleged conflicts. We see nothing unreasonable about that determination. Additionally, TMA barred Lockheed from bidding on future purchased care requirements. Finally, we agree with the government that it is reasonable for the CO to defer evaluating certain potential unequal access to information conflicts until Lockheed actually bids on future contracts for which it has obtained non-public information by virtue of its performance of the contract at issue in this case. See ARINC, 77 Fed.Cl. at 202 (setting out a four-part test to be applied when a protester alleges that the successful bidder on a current contract unfairly benefited from nonpublic information obtained through a prior contract); see also Axiom, No. B-298870.3, 2007 WL 2141694, at  (In our view, conflicts that might arise from subsequent awards can properly be analyzed as part of those subsequent award decisions, and need not be addressed at this juncture.). Turning to the enforceability of Lockheed's mitigation plan, the parties agree that the government would have had legal recourse if Lockheed failed to adhere to the plan. Oral Arg. at 30:00-30:44, available at http://oral arguments.cafc.uscourts.gov/mp3/XXXX-XXXX.mp3. However, the trial court doubted that the CO could be trusted with future enforcement of the plan. See, e.g., Axiom II, 80 Fed.Cl. at 533 (I don't know if I can put it any better than to say that I've kind of lost confidence in this CO's ability to be the proper person to monitor this.); id. at 539 ([T]he court has little confidence that the CO will identify and properly mitigate potential or actual OCIs in the future.). The court expressed interest in finding a monitor to serve as a pair of independent eyes for the Court, id. at 533, and ordered the parties to show cause why the court should not enter an order that designated the United States Army Audit Agency (`USAAA') to submit an annual compliance report to the court regarding implementation of the proposed mitigation plan, id. at 534. Ultimately, the government took the position that it would prefer to have the contract set aside instead of submitting to continuing oversight by an auditor and the court. Id. While we doubt that it would ever be appropriate for the court to interfere with the performance of a contract based solely on its belief or suspicion that the CO cannot be trusted, court interference is certainly inappropriate in this case because the CO did not act arbitrarily or capriciously in evaluating the mitigation efforts. The Supreme Court has warned against undue judicial interference with the lawful discretion given to agencies. See Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 67, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) (The prospect of pervasive oversight by federal courts over the manner and pace of agency compliance with such congressional directives is not contemplated by the APA.). Moreover, [g]overnment officials are presumed to do their duty, and one who contends they have not done so must establish that defect by clear evidence. Carolina Tobacco Co. v. Bureau of Customs & Border Prot., 402 F.3d 1345, 1350 (Fed.Cir.2005) (quotation marks omitted). Accordingly, we conclude that the Court of Federal Claims erred by finding that the unenforceability of Lockheed's mitigation plan was grounds for setting aside the contract.