Court Opinion

ID: 8484412
Source: CourtListenerOpinion
Date Created: 2022-11-17 14:00:51.964245+00
Date Added: 2024-06-11T16:49:53.582282
License: Public Domain

In the United States Court of Federal Claims
                                               No. 22-1263 C
                                     Filed Under Seal: November 3, 2022
                                        Reissued: November 16, 2022 ∗

* * * * * * * * * * * * * * * * ** *
                                         *
BAE SYSTEMS NORFOLK SHIP                 *
REPAIR, INC.                             *
                                         *
                   Plaintiff,            *
                                         *
       v.                                *
                                         *
THE UNITED STATES,                       *
                                         *
                   Defendant,            *
                                         *
and                                      *
                                         *
METRO MACHINE CORP. d/b/a                *
GENERAL DYNAMICS NASSCO-                 *
NORFOLK,                                 *
                                         *
                   Defendant-Intervenor. *
                                         *
 * * * * * * * * * * * * * * * * ** *

        Barbara Ann Duncombe, of Indianapolis, IN, with whom were Suzanne Sumner, Erin R.
Davis, and Brandon E. Dobyns, Taft Stettinius and Hollister LLP, all of Dayton, OH, for
Plaintiff.

      Galina Fomenkova, Trial Attorney, Commercial Litigation Branch, Civil Division,
Department of Justice, with whom was Steven M. Mager, Senior Trial Attorney, all of
Washington, D.C., for Defendant, and Bradley S. Garner, Associate Counsel, Mid-Atlantic
Regional Maintenance Center, Naval Sea Systems Command, of Norfolk, VA, of counsel.

       Noah B. Bleicher, with whom was Nathan E. Castellano, Scott E. Whitman, and Aime J.
Joo, Jenner & Block, LLP, all of Washington, D.C., for Defendant-Intervenor

         ∗
           Pursuant to the protective order entered in this case, this opinion was filed initially under seal. The parties
did not provide any proposed redactions of confidential or proprietary information; however, the Court did make
minor typographical and stylistic corrections to this version of the opinion.
                                     OPINION AND ORDER

SOMERS, Judge.

        On September 8, 2022, Plaintiff, BAE Systems Norfolk Ship Repair, Inc. (“BAE”), filed
a pre-award bid protest challenging the United States Department of the Navy’s cancellation of a
solicitation for proposals to provide maintenance and repair services for the USS Bainbridge
(DDG-96) (“Bainbridge”), an Arleigh Burke class guided-missile destroyer. The Navy issued
Solicitation No. N50054-22-R0003 (“First Solicitation”) on March 15, 2022. BAE was the only
contractor to make an offer in response to the First Solicitation, as Defendant-Intervenor, Metro
Machine Corp d/b/a General Dynamics NASSCO-Norfolk (“NASSCO”), declined to submit a
bid. After several amendments, the Navy cancelled the First Solicitation, and issued Solicitation
No. N50054-22-R-0015 (“Second Solicitation”), which relaxed the timeframe within which the
successful offeror must place the ship in dry dock. According to the Navy, it cancelled the First
Solicitation and issued the Second Solicitation in order to increase competition for the repair and
overhaul work on the Bainbridge.

        The Navy invoked Federal Acquisition Regulation (“FAR”) 15.206(e) as the sole
authority for cancelling the First Solicitation. In this pre-award bid protest, Plaintiff argues, inter
alia, that the Navy did not have a reasonable basis under FAR 15.206(e) to cancel the First
Solicitation. As a result, Plaintiff asks the Court to reinstate the First Solicitation and to
permanently enjoin the Navy from proceeding with the Second Solicitation. See ECF Nos. 33
(“Pl.’s MJAR”) and 34 (“Pl.’s Inj. Mot.”). The government and Defendant-Intervenor have each
cross-moved for judgment on the administrative record. See ECF Nos. 37 (“Gov.’s Cross-
MJAR”) and 38 (“NASSCO’s Cross-MJAR”). For the following reasons, the Court denies
Plaintiff’s motions for judgment on the administrative record and for a permanent injunction,
denies in part and grants in part the government’s cross-motion, and grants Defendant-
Intervenor’s cross-motion.

                                         BACKGROUND

        In order to maintain and modernize its fleet, the Navy routinely sends its vessels for
routine maintenance, repair, and alterations—often while dry-docked—for varying periods of
time known as “availabilities.” This bid protest arises out of the Navy’s requests for proposals
for an availability to provide a “complex ship repair and overhaul” of the Bainbridge. AR 2.
According to the solicitations at issue, the Navy is soliciting a Docking Selected Restricted
Availability (“DSRA”) contract for the maintenance, repair, and modernization of the
Bainbridge, during which the awardee will address hundreds of work specific work items. AR
169–1095. The availability for this work is slated to last approximately 250 days. AR 2799.
During this availability, some of the necessary work items require dry-docking, which means
that, for some period of time, the Bainbridge must be taken out of the water and placed in dry
dock. AR 1084–90. As a result, the Navy required offerors to “possess a valid Master Ship
Repair Agreement (MSRA) and have access to a NAVSEA Certified Dry-Dock capable of
docking (USS BAINBRIDGE DDG-96) in accordance with MIL-STD1625D9SH) in order to
receive an award.” AR 1161. Moreover, in accordance with federal law regarding naval ship

                                                  2
repair and maintenance, 1 the Navy restricted the place of performance for the Bainbridge DSRA
to Norfolk, VA, the home port of the Bainbridge. Id.

        On October 25, 2021, the Navy promulgated a Sources Sought Announcement for the
First Solicitation, which supplied a questionnaire to assess capabilities and requested letters of
interest by November 8, 2021. AR 23–24. BAE and NASSCO were the only entities to respond
that they intended to submit a proposal. AR 19, 49–51, 53–54. The Navy issued the First
Solicitation for the Bainbridge DSRA contract on March 15, 2022, seeking proposals by April
26, 2022. AR 1166. It also asked that if any potential offeror did not intend to make a bid, it
notify the Navy accordingly. AR 3034. Amendment 0002 to the First Solicitation extended the
proposal due date to May 23, 2022. AR 2725. The Navy estimated that it would make a contract
award by October 3, 2022. AR 3034. Under the amended First Solicitation, repair and
maintenance were scheduled to begin on November 28, 2022, and conclude on August 3, 2023.
AR 2799. 2 Importantly for this protest, the First Solicitation required that the Bainbridge be
placed in dry dock during the first 10 percent of its 249-day availability (“10 percent docking
requirement”), meaning that the Bainbridge needed to be dry-docked no later than 24 days after
November 28, 2022.

        It appears from the record that, because of this 10 percent docking requirement,
NASSCO advised the Navy, on March 24, 2022, it would not be submitting a bid, explaining that
“[a]fter reviewing our scheduled workload and facility options during the period of the USS
Bainbridge DSRA, NASSCO-Norfolk regretfully submits a NO BID notification for this
solicitation.” AR 3342. On May 23, 2022, the Navy reached out to NASSCO because it had not
received a bid from NASSCO in response to the First Solicitation. AR 3346. That same day,
NASSCO responded, reminding the Navy of its March 24, 2022, email communicating its
“intent to no bid the Bainbridge due to not having a drydock available to support the period of
performance.” Id. NASSCO only has one dry dock capable of dry-docking the Bainbridge at its
home port. See NASSCO Cross-MJAR at 9 n.8.

        BAE submitted a proposal on May 23, 2022, in accordance with the amended First
Solicitation. AR 3356. BAE was the only offeror to respond to the First Solicitation, and on
June 29, 2022, the Navy requested that BAE submit Certified Cost and Pricing Data (“CCPD”),
referencing Defense Federal Acquisition Regulation Supplement (“DFARS”) § 252.215-7008,
which guides military procurements in situations in which only one offeror responds to a
solicitation. AR 4187. On July 28, 2022, BAE transmitted the CCPD to the Navy. AR 4207.
However, after receiving the CCPD from BAE, on August 9, 2022, the Navy issued Amendment
0006 to the First Solicitation, extending the proposal submission deadline to August 31, 2022.

        1
           Federal law requires that for ship repair or maintenance expected to last less than ten months,
“the Secretary of the Navy shall determine if there is adequate competition available among firms able to
perform the work at the homeport of the vessel” before issuing a solicitation for a contract for short-term
overhaul, repair, or maintenance for the work thereof. 10 U.S.C. § 8669a(c)(1). If there is adequate
competition, the Navy must issue a solicitation and award a contract only to firms able to perform the
required work at the home port of the vessel. Id.
         2
           The Navy made several additional Amendments to the First Solicitation, none of which further
altered the project’s start or end date. AR 3338.

                                                     3
AR 3060. The next day, on August 10, 2022, the Navy issued Amendment 0007, which
cancelled the First Solicitation pursuant to FAR 15.206(e). AR 3289.

        On August 18, 2022, the Navy issued the Second Solicitation for the Bainbridge DSRA,
which provided that proposals were due by September 19, 2022, and that the anticipated award
date was November 2, 2022. AR 9341, 10684. In the Second Solicitation, the start and end
dates of the availability, the scope of work, and terms and conditions remained the same as they
were in the First Solicitation, but the 10 percent docking requirement was relaxed. AR 10684. 3
Specifically, the amendment required the contractor to “accomplish drydocking the ship . . .
within the first 10 percent of the contractual period or a later docking date proposed by the
contractor as long as the end of the contract date remains unchanged while meeting all
contractual requirements.” AR 11336 (emphasis added). Based on the most recent amendment
to the Second Solicitation, proposals were due on September 26, 2022. AR 11105.

        Principally, this protest challenges the reasonableness of the Navy’s decision to cancel
the First Solicitation under FAR 15.206(e) based on the relaxation of the 10 percent docking
requirement. Plaintiff alleges that the cancellation decision was arbitrary, capricious, and not in
accordance with FAR 15.206(e) and the Competition in Contracting Act (“CICA”). See ECF
No. 1 (“Compl.”) at ¶¶ 3, 32–57. Additionally, Plaintiff contends that the Navy prejudiced it by
requiring it to produce CCPD, which it alleges may place it at a disadvantage in responding to
the Second Solicitation. Id. at ¶¶ 58–62. The government and NASSCO both contend that the
Navy’s decision to cancel the First Solicitation and issue the Second Solicitation was reasonable.
See generally Gov.’s Cross-MJAR, NASSCO’s Cross-MJAR. Specifically, both the government
and NASSCO argue that the Navy cancelled the First Solicitation for the sole purpose of
increasing competition for the Bainbridge DSRA by issuing a new solicitation that was likely to
lead NASSCO to submit an offer. Gov.’s Cross-MJAR at 1, NASSCO’s Cross-MJAR at 13, 17.

                                            DISCUSSION

A.      Legal Standard

         The Tucker Act, as amended by the Administrative Dispute Resolution Act, provides the
Court with “jurisdiction to render judgment on an action by an interested party objecting to a
solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed
award or to the award of a contract or any alleged violation of statute or regulation in connection
with a procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(1). In such actions, the
Court “shall review the agency’s decision pursuant to the standards set forth in section 706 of
title 5.” Id. § 1491(b)(4). Accordingly, in bid protests, the Court examines whether an agency’s
action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706. Under such review, an “award may be set aside if either: (1) the
procurement official’s decision lacked a rational basis; or (2) the procurement procedure

        3
          The chart outlining the project’s milestones in the original version of the Second Solicitation
reflected the removal of the 10 percent docking requirement. AR 10684. However, the same change was
not reflected in the specification package until Amendment 0005 to the Second Solicitation. See AR
11324, 11336. The Navy indicated that the failure to make this change in the first iteration of the Second
Solicitation was due to an administrative error. AR 11324; see also Gov.’s Cross-MJAR at 6.

                                                    4
involved a violation of regulation or procedure.” Impresa Construzioni Geom. Domenico Garufi
v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001).

         On the first ground, “courts have recognized that contracting officers are entitled to
exercise discretion upon a broad range of issues confronting them in the procurement process.”
Id. (citations and internal quotations omitted). Thus, the Court must “determine whether the
contracting agency provided a coherent and reasonable explanation of its exercise of discretion,
. . . and the disappointed bidder bears a heavy burden of showing that the award decision had no
rational basis.” Id. at 1332–33 (citations and internal quotations omitted). On the second
ground, “the disappointed bidder must show a clear and prejudicial violation of applicable
statutes or regulations.” Id. at 1333 (citation and internal quotations omitted). In the case of a
negotiated procurement, such as a “best value” procurement, the burden on a plaintiff to prove an
award was arbitrary, capricious, an abuse of discretion, or contrary to law is heavier than it is in
other protests. See, e.g., E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996);
Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995 (Fed. Cir. 1996) (“This court . . . must
afford great deference to agencies’ decisions in relation to procurement.”).

         Bid protests are generally decided on cross-motions for judgment on the administrative
record, pursuant to Rule 52.1 of the Rules of the United States Court of Federal Claims
(“RCFC”). RCFC 52.1 requires that the Court “make factual findings from the record evidence
as if it were conducting a trial on the record.” Bannum, Inc. v. United States, 404 F.3d 1346,
1354 (Fed. Cir. 2005). “Unlike a motion for summary judgment, a genuine dispute of material
fact does not preclude a judgment on the administrative record.” Id. at 1355–56. Therefore, in
reviewing cross-motions for judgment on the administrative record, “the court asks whether,
given all the disputed and undisputed facts, a party has met its burden of proof based on the
evidence in the record.” Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 630 (2014).

        However, before the Court can proceed to the merits of a bid protest, a protestor must
establish that it has standing. Castle v. United States, 301 F.3d 1328, 1337 (Fed. Cir. 2002)
(“Standing is a threshold jurisdictional issue, which . . . may be decided without addressing the
merits of a determination.”); see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)
(“The party invoking federal jurisdiction bears the burden of establishing [the] elements [of
standing].”). “It is well-established that the plaintiff bears the burden of establishing the court’s
jurisdiction by a preponderance of the evidence.” Brandt v. United States, 710 F.3d 1369, 1373
(Fed. Cir. 2013). In bid protests, “[o]nly an ‘interested party’ has standing to challenge a
contract award.” Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384 (Fed. Cir.
2012) (quoting Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006)); 28
U.S.C. § 1491(b). This means that in bid protests, standing “is limited to actual or prospective
bidders or offerors whose direct economic interest would be affected by the award of the contract
or by the failure to award the contract.” Am. Fed’n of Gov’t Emps., AFL-CIO v. United States,
258 F.3d 1294, 1302 (Fed. Cir. 2001). Accordingly, Plaintiff must prove two elements to
establish it has standing: (1) that it is an actual or prospective bidder/offeror, and (2) that it
possesses a direct economic interest in the award of the contract. CGI Fed. Inc. v. United States,
779 F.3d 1346, 1348 (Fed. Cir. 2015). In the instant protest, no party has questioned Plaintiff’s
standing, and there does not appear to be any issue of Plaintiff’s ability to proceed with this

                                                 5
protest, because it is an actual bidder, and it has demonstrated that it has a direct economic
interest in the protest.

B.     Analysis

        According to the Navy, it cancelled the First Solicitation because “FAR 15.206(e) . . .
directs cancellation of the solicitation[] and re-issuance of a new solicitation” and “[m]arket
research indicates competition will be gained through the issuance of a new [s]olicitation.” AR
3323–24. Plaintiff contends that this decision to cancel the First Solicitation lacked a reasonable
basis and was contrary to procurement law in that it did not comport with the requirements of
FAR 15.206(e) and that, even to the extent that it may have, the Navy did not properly document
its decision to cancel and reissue the solicitation. See Pl.’s MJAR at 10–28. Plaintiff also asserts
that the Navy’s use of FAR 15.206(e) as justification to cancel the First Solicitation was
pretextual. Additionally, Plaintiff argues that it is at a competitive disadvantage in responding to
the Second Solicitation because it provided certified cost and pricing data (“CCPD”) in response
to the First Solicitation. See ECF No. 39 (“Pl.’s Resp.”) at 15; Compl. ¶¶ 58–62. However, at
oral argument, Plaintiff’s counsel all but acknowledged that this argument was not ripe given
that the Navy has not yet determined the outcome of the competition on the Second Solicitation.
Accordingly, although the Court will briefly address Plaintiff’s CCPD argument below, this
protest primarily surrounds whether the Navy had a reasonable and non-pretextual basis under
FAR 15.206(e) to cancel the First Solicitation.

        In response to Plaintiff’s arguments, the government seeks judgment on the
administrative record and attempts to defend the Navy’s cancellation—not on the merits of the
administrative record’s support of a cancellation pursuant to FAR 15.206(e)—but rather, by
asserting that all the government must demonstrate is that the Navy had some reasonable basis
for cancelling the solicitation. See Gov.’s MJAR at 8–23. In other words, according to the
government, if the record supports any reasonable basis—be it FAR 15.206(e) or otherwise—for
cancelling the solicitation, then the Navy’s actions must be sustained. See id. Conversely,
Defendant-Intervenor moves for judgment on the administrative record on the grounds that the
Navy’s actions were reasonable and consistent with the requirements of FAR 15.206(e). See
NASSCO’s Cross-MJAR at 17–22.

        For the reasons that follow, the Court concurs with Defendant-Intervenor and finds that
the Navy had a reasonable basis under FAR 15.206(e) to cancel the First Solicitation. In
addition, the Court determines that (1) Plaintiff has not demonstrated that the Navy’s
cancellation of the First Solicitation in order to increase competition was pretextual, and (2)
Plaintiff’s argument regarding CCPD is not ripe for consideration.

       1.      The Navy’s Decision to Cancel the First Solicitation Must be Reasonably
               Based on FAR 15.206(e)

        The fundamental flaw in the government’s argument in its motion for judgment on the
administrative record is its assertion that review of the Navy’s cancellation decision is not
constrained by the Navy’s stated reason for cancelling the solicitation. In other words, according
to the government, although the Navy stated that it was cancelling the solicitation pursuant to

                                                 6
FAR 15.206(e), so long as some rational basis to cancel the solicitation exists, the Navy’s
decision must be upheld. See, e.g., ECF No. 42 (“Gov.’s Reply”) at 6 (“In effect, FAR 15.206(e)
. . . is not the lodestar for determining whether that cancellation was proper. The relevant
standard here is whether the Navy had a reasonable basis to cancel the first solicitation . . . .”).
This argument, however, is an approach to defending administrative action the Supreme Court
has consistently rejected, including most recently in Department of Homeland Security v.
Regents of the University of California, 140 S. Ct. 1891 (2020).

        As the Supreme Court explained in Regents, “[t]he basic rule here is clear: An agency
must defend its actions based on the reasons it gave when it acted.” Id. at 1909. The Regents
decision, as it acknowledges, was not treading any new ground in reaching this conclusion: “[i]t
is a ‘foundational principle of administrative law’ that judicial review of agency action is limited
to ‘the grounds that the agency invoked when it took the action.’ Id. at 1907 (quoting Michigan
v. Env’t. Prot. Agency, 576 U.S. 743, 758 (2015)). In the instant protest, the Navy invoked FAR
15.206(e) to justify cancellation of the First Solicitation; therefore, the Navy’s cancellation
decision rises and falls in accordance with whether the administrative record supports a
reasonable basis for cancellation under FAR 15.206(e). See id. at 1907–09; AR 3323–34.

         The government is of course correct that the Navy may have possessed some other
reasonable basis apart from FAR 15.206(e) for cancelling the First Solicitation. In fact, the
administrative record has some information that could potentially have supported a reasonable
basis for a best interest cancellation of the related solicitation for repair and overhaul work on the
USS Ross. See, e.g., FAR 15.305(b) (“The source selection authority may reject all proposals
received in response to a solicitation, if doing so is in the best interest of the Government.”). For
instance, it may be that the deliberations that appear on pages 3305–3309 of the administrative
record would support a best interest cancellation of the First Solicitation, but the Navy did not
invoke best interests in cancelling the First Solicitation and, even if it had, this record material
relates to the Ross not the Bainbridge. More importantly though, allowing government counsel
to search the record for an alternative, post hoc explanation for the cancellation decision would
be akin to the approach rejected in Regents regarding what an agency is permitted to do on
remand. See Motor Vehicle Mfrs. Ass’n. of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S.
29, 50 (1983) (explaining that “courts may not accept . . . counsel’s post hoc rationalizations for
agency action”). As Chief Justice Roberts explained, the agency does not get a second bite at the
apple on remand to provide a new, alternative explanation for its decision-making; rather,
“[w]hen an agency’s initial explanation ‘indicate[s] the determinative reason for the final action
taken,’ the agency may elaborate later on that reason (or reasons) but may not provide new
ones.’” Regents, 140 S. Ct. at 1908 (alteration in original) (emphasis added) (quoting Camp v.
Pitts, 411 U.S. 138, 143 (1973) (per curiam)). The only avenue for an agency to provide a new
explanation for its decision-making is “by taking new agency action.” Regents, 140 S. Ct. at
1908. Although, “[a]n agency taking this route is not limited to its prior reasons, [it] must
comply with the procedural requirements for new agency action.” Id.

        Here, the Navy’s cancellation decision gave a “determinative reason for the final action
taken;” therefore, the Justice Department may not come into this Court and “provide new ones.”
Id.; see also Gerber v. Norton, 294 F.3d 173, 184 (D.C. Cir. 2002) (“[Courts] do not generally
give credence to such post hoc rationalizations, but rather consider only the regulatory rationale

                                                  7
actually offered by the agency [at the time of such action].” (citations and internal quotations
omitted)). Instead, the government is limited here to either defend the Navy’s actions based on
FAR 15.206(e) or move for a remand to the Navy to rescind the cancellation decision and “take[]
new agency action” to re-cancel the First Solicitation. See Regents, 140 S. Ct. at 1908 (“The
District Court’s remand thus presented DHS with a choice: rest on the Duke Memorandum while
elaborating on its prior reasoning, or issue a new rescission bolstered by new reasons absent from
the Duke Memorandum.”). Allowing the government to argue that the Navy’s “broad
discretion” in cancelling solicitations permitted what was done here regardless of FAR 15.206(e)
would be just the type of impermissible “post hoc rationalization” the Supreme Court has
forbidden. Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971).

        Moreover, even if the Court were to have entertained such a post hoc argument, the
government provided no alternative authority for the Navy’s cancellation in any event. The only
guiding principle the government provided was that the Navy’s decision must have been
“otherwise reasonable.” Pl.’s MJAR at 17. But this is a Department of Defense solicitation and,
according to 10 U.S.C. § 3303(c), a provision of the statutory scheme governing military
contracts, “[e]xcept as provided in section 3301(b) of this title, the head of the agency shall
award a contract with reasonable promptness to the responsible source whose proposal is the
most advantageous to the United States, considering only cost or price and the other factors
included in the solicitation.” 10 U.S.C. § 3303(c). Stated differently, at least for military
procurements, the default rule is that a solicited contract shall be awarded. The exception to this
default rule, which is “the only statutory basis for refusing to make any award at all,” Seventh
Dimension, LLC v. United States, 160 Fed. Cl. 1, 17 (2022), provides that “[a]ll sealed bids or
competitive proposals received in response to a solicitation may be rejected if the head of the
agency determines that such action is in the public interest.” 10 U.S.C. § 3301(b). 4 In other
words, the government is simply incorrect in its statement that the Navy has some untethered,
plenary cancellation authority that is only limited by reasonableness. 5 Rather, these Title 10
provisions provide that an award must be made unless the Secretary of the Navy determines it
would be in the public interest not to award. See Tolliver Grp., Inc. v. United States, 151 Fed.
Cl. 70, 119 (2020) (finding agency violated 10 U.S.C. § 3301(b) when “[b]ased on the
Administrative Record, the Court was unable to find the involvement of the agency head in a
cancellation decision, [or] any delegation of authority by the head of agency to the contracting
officer to make a cancellation decision . . .”). CICA also provides an avenue for the Navy to
cancel a solicitation and that is precisely the route the Navy chose here by invoking the authority
of FAR 15.206(e), a provision that helps ensure that CICA’s competition requirements are met.
See Seventh Dimension, 160 Fed. Cl. at 18–20.

        4
           “[T]here is no meaningful difference between the decision to reject all bids or to cancel the
entire solicitation.” Madison Servs., Inc. v. United States, 92 Fed. Cl. 120, 126 n.3 (2010) (citing FFTF
Restoration Co., LLC v. United States, 86 Fed. Cl. 226, 237 n.15 (2009)).
         5
           The Army made a similar argument in Seventh Dimension, but Judge Solomson similarly struck
it down, explaining that the government “ignore[d] the language of FAR 15.206(e), which is the only
provision upon which the government now relies.” 160 Fed. Cl. at 30. Likewise, here, the Navy canceled
the First Solicitation “in accordance with FAR 15.206(e),” mentioning no other legal authority. See AR
3289.

                                                   8
        Furthermore, the government incorrectly argues that even if the Navy’s use of FAR
15.206(e) to cancel the First Solicitation was somehow improper, because the Navy only needed
to act reasonably, any resulting error would be harmless. According to the government, the
administrative record shows that Navy acted reasonably so the Court can essentially look past
any failure to demonstrate compliance with FAR 15.206(e). Unfortunately for the government,
this harmless error argument was rejected in Regents. 140 S. Ct. at 1909 (“The Government . . .
protests that requiring a new decision before considering [the Secretary’s] new justifications
would be ‘an idle and useless formality.’ Procedural requirements can often seem such. But
here the rule serves important values of administrative law.”) (quoting NLRB v. Wyman-Gordon
Co., 394 U.S. 759, 766, n.6 (1969) (plurality opinion) (citations omitted)). In other words, just
because the Navy could have cancelled the First Solicitation for some reason apart from FAR
15.206(e), does not mean that the Court may ignore the Navy’s stated reason. If the Navy
wanted to invoke some other cancellation authority, such as 10 U.S.C. § 3301(b) or FAR
15.305(b), it would have to go back and re-cancel the solicitation on that basis. Again, Chief
Justice Roberts explained the reasons for not applying the harmless error standard the
government argues for in this protest:

       Requiring a new decision before considering new reasons promotes “agency
       accountability,” Bowen v. American Hospital Assn., 476 U.S. 610, 643 (1986), by
       ensuring that parties and the public can respond fully and in a timely manner to an
       agency’s exercise of authority. Considering only contemporaneous explanations
       for agency action also instills confidence that the reasons given are not simply
       “convenient litigating position[s].” Christopher v. SmithKline Beecham Corp., 567
       U.S. 142, 155 (2012) (internal quotation marks omitted). Permitting agencies to
       invoke belated justifications, on the other hand, can upset “the orderly functioning
       of the process of review,” SEC v. Chenery Corp., 318 U. S. 80, 94 (1943), forcing
       both litigants and courts to chase a moving target.

Regents, 140 S. Ct. at 1909.

        Simply put, the fact that the Navy could have cancelled this solicitation for a whole host
of reasons, does not somehow obviate the need for the government to defend the cancellation
decision based on the reason stated in the administrative record: to increase competition pursuant
to FAR 15.206(e). To the extent that the government’s motion for judgment on the
administrative record argues that all it needs to demonstrate here is that the Navy had some
reasonable basis for cancelling the First Solicitation, the government’s motion is denied.

       2.      The Decision to Cancel the First Solicitation Satisfies FAR 15.206(e)

        As explained above, the government invoked FAR 15.206(e) as the sole authority for
cancelling the First Solicitation; therefore, the reasonableness of its decision must be determined
in accordance with that provision. FAR 15.206(e) provides that:

       If, in the judgment of the contracting officer, based on market research or
       otherwise, an amendment proposed for issuance after offers have been received is
       so substantial as to exceed what prospective offerors reasonably could have

                                                 9
       anticipated, so that additional sources likely would have submitted offers had the
       substance of the amendment been known to them, the contracting officer shall
       cancel the original solicitation and issue a new one, regardless of the stage of the
       acquisition.

48 C.F.R. § 15.206(e) (emphasis added).

         Generally, FAR 15.206(e) is invoked in the bid protest context in two different situations.
First, a disappointed offeror may utilize the provision to challenge a contract award because an
amendment made after bids were submitted “changed a solicitation or contract requirement that
was previously determinative of the elimination” of such offeror. Golden Mfg. Co., Inc. v.
United States, 107 Fed. Cl. 264, 276 (2012). Second, and relevant here, a putative awardee may
challenge the decision by an agency to cancel a solicitation by claiming the agency failed to
satisfy the requirements of FAR 15.206(e) when it cancelled a solicitation after offers were
received. Seventh Dimension, 160 Fed. Cl. at 20. Under the first scenario, an increase in
competition is presumed because the disappointed offeror would have bid if the amendment to
the solicitation was a contract requirement from the inception. Id. (“[T]he fact that a plaintiff is
seeking cancellation of an award (and a concomitant reprocurement) itself provides evidence of
the likelihood of increased competition, assuming the plaintiff is otherwise an ‘interested party,’
28 U.S.C. § 1491(b), and can demonstrate prejudice on the merits.”). Under the second scenario,
the contracting officer must “have some concrete basis for concluding” that the amendment is so
substantial as to exceed what prospective offerors reasonably could have anticipated so that
additional sources likely would have submitted offers had the substance of the amendment been
known to them. Id.

        Plaintiff argues that the Navy has run afoul of FAR 15.206(e) in two respects. First, it
contends that nothing in the administrative record reflects that the contracting officer’s decision
to cancel the First Solicitation was “based on market research or otherwise.” See Pl.’s MJAR at
10-26. Second, it contends that the relaxation of the 10 percent docking requirement was not a
change a sufficiently substantial change under FAR 15.206(e). See id. Plaintiff fails to prove
either of its contentions.

       a.      The contracting officer’s judgment was informed by “market research or
               otherwise”

         FAR 15.206(e) requires that the contracting officer’s judgment regarding the 10 percent
docking requirement amendment be “based on market research or otherwise.” 48 C.F.R.
§ 15.206(e). This requirement places a restraint on the contracting officer’s judgment in that the
contracting officer’s judgment in assessing whether cancellation is required must be “based on
evidence or facts in the administrative record,” not assumptions or conjecture. Seventh
Dimension, 160 Fed. Cl. at 26; see also id. at 25 (noting that under FAR 15.206(e) the
contracting officer does “not have plenary authority to cancel the Solicitation and that the CO’s
judgment that there would be more offers must be based on something in the record”) (internal
marks omitted). Although this does not mean that a contracting officer must be certain based on
the market research that an amendment would not be anticipated and would lead to additional
offers, it does mean that the contracting officer must have “a reasonable basis for concluding

                                                 10
that a proposed amendment rises to the level contemplated by the regulation.” Madison Servs.,
Inc., 92 Fed. Cl. at 126.

          Plaintiff asserts that the administrative record contains no market research or otherwise
from which the contracting officer could have reasonably concluded that relaxation of the 10
percent docking requirement was a substantial amendment under FAR 15.206(e). Pl.’s MJAR at
21 (“The AR also reflects that the Navy conducted no additional market research to determine
whether a substantial change to the First Solicitation would elicit more bids.”). Rather,
according to Plaintiff, the administrative record “shows nothing more than mere speculation that
such a change to the requirements would encourage NASSCO to bid.” Id. at 18. Instead of
being based on market research, Plaintiff contends that the Navy worked backwards by first
deciding it wanted competition and then simply conjured up an amendment to justify cancelling
the First Solicitation. Id. at 21–22. In what seems to be an accusation of pretext by the Navy
(discussed separately below), Plaintiff argues that the relaxation of the 10 percent docking
requirement was simply an excuse to provide a basis for the Navy to award the Bainbridge
DSRA to NASSCO for reasons unrelated to competition. Id. at 22–23 (“Since NASSCO
indicated it could not meet the drydock schedule, the reason for the relaxation of the schedule in
. . . the Second Solicitation is clear—to allow NASSCO to bid[] and win the contract . . . .”).

         Conversely, the government and NASSCO counter that the Navy has clearly
demonstrated that the contracting officer’s decision was based on market research. 6 The
government contends that the Navy’s communications with NASSCO were “market research or
otherwise,” which “‘made it clear that the only reason competition was not obtained was the
restrictions of the dry-dock requirement.’” Gov.’s Cross-MJAR at 20 (citing AR 3323).
Moreover, NASSCO asserts that the contracting officer engaged in communications with
NASSCO and conducted other data-driven analysis to determine that the 10 percent docking
requirement was the reason NASSCO did not bid on the Bainbridge DSRA and that this is
sufficient to satisfy the requirements of FAR 15.206(e). NASSCO’s Cross-MJAR at 10–12, 18–
22. The Court concurs with the government and NASSCO.

        Despite Plaintiff’s contentions and its preferred reading of the administrative record, the
Court finds that there was sufficient market research to inform the contracting officer’s judgment
that cancellation was necessary. 7 FAR § 2.101 defines “market research” as “collecting and
        6
          As discussed above, the government’s primary argument in support of its motion for judgment
on the administrative record is that the Navy was not restricted by FAR 15.206(e) in making its
cancellation decision and that instead the Navy need only show that its decision was reasonable. See
Gov.’s Cross-MJAR at 16–20. Nonetheless, the government did address, in part, how the Navy’s
decision comported with FAR 15.206(e), including the “market research or otherwise” component. Id. at
20.
        7
          Although there are relatively few cases discussing FAR 15.206(e), judges of this Court that have
examined the provision have interpreted the phrase “market research or otherwise” differently. Compare
Seventh Dimension, 160 Fed Cl. at 24 (“Accordingly, this Court interprets the phrased ‘based on market
research or otherwise’ to mean ‘based on market research or evidence similar to market research’) with
Madison Servs., Inc., 92 Fed. Cl. at 128 (concluding that “‘based on market research or otherwise’ . . . is
naturally read to mean ‘based on market research or otherwise based’”). The main issue regarding this
difference in interpretation is the phrase “or otherwise.” Fortunately, the Court need not grapple with the

                                                    11
analyzing information about capabilities within the market to satisfy agency needs.” 48 C.F.R.
§ 2.101. Nothing in the FAR’s definition prescribes or limits the way in which an agency may
collect information. Furthermore, FAR 10.002 provides that “market research may include . . .
[c]ontacting knowledgeable individuals in Government and industry regarding market
capabilities to meet requirements.” 48 C.F.R. § 10.002(b)(2)(i). It also states that “[t]he extent
of market research will vary, depending on such factors as urgency, estimated dollar value,
complexity, and past experience.” Id. at § 10.002(b)(1).

         Given the statutory mandate that the Bainbridge be serviced at its home port in Norfolk,
VA, the relevant market of contractors capable of completing the work called for in the
solicitations is exceedingly small, and thus makes “collecting and analyzing information about
capabilities within the market” simpler than it may be in other instances. 48 C.F.R. § 2.101.
There is no dispute that Plaintiff and NASSCO were the only two entities capable of performing
the repair and overhaul work called for in the solicitations in the Norfolk area, and they were the
only contractors to respond to the Sources Sought Announcement. 8 The parties confirmed as
much during oral argument when directly asked by the Court whether other potential capable
offerors exist. ECF No. 47 (“Arg. Transcript”), at 13:5–7; 69:1–8; 90:4–6. As a result of this
extremely small market of available contractors “[t]he extent of market research” required here
was not exceedingly high. 48 C.F.R. § 10.002(b)(1). With the initial market research that was
conducted to identify how many potential, capable offerors existed already completed, AR 17–
21, an email or phone call between the Navy and NASSCO was enough to satisfy the market
research requirement. That is to say, the Navy knew there were only two potential offerors based
on its initial market research; only two potential offerors replied to the Sources Sought
Announcement; and one potential offeror did not submit a proposal. Therefore, only one market
research question remained: why did NASSCO decide not to submit a proposal in response to the
First Solicitation? The Navy did not need to hire a rocket scientist to conduct market research to
answer this question.

       Rather, and contrary to Plaintiff’s assertions, the administrative record contains market
research sufficient to support a finding that the contracting officer had a reasonable basis for the
exercise of her judgment in cancelling the First Solicitation:

       •   The administrative record shows that the Navy conducted market research before
           issuing the First Solicitation that demonstrated that there were only two companies
           capable of performing the Bainbridge DSRA at its home port. AR 17–21, 49–50, 53–
           54, 1100.
       •   The administrative record shows that in response to the Sources Sought
           Announcement only two potential offerors replied. AR 23–24.
       •   The administrative record shows that the Navy communicated with NASSCO to
           inquire why it did not make an offer in response to the First Solicitation, and
           NASSCO responded that it did not bid on the Bainbridge DSRA “due to not having a

meaning of “or otherwise,” as the administrative record demonstrates that the Navy conducted “market
research” upon which the contracting officer based her decision.
        8
          All of the parties agree that BAE and NASSCO were the only possible competitors for the
Bainbridge procurement. See Pl.’s Resp. at 12; Gov.’s Cross-MJAR at 3; NASSCO’s Cross-MJAR at 6,
18.

                                                 12
            drydock available to support the period of performance.” AR 3339; see also AR
            3306 (“BAINBRIDGE FY23 DSRA only received one bid (BAE Norfolk) due to
            restrictive docking milestones that precluded NASSCO’s participation.”).
       •    The administrative record shows that the Navy considered data and charts regarding
            current and projected workloads and docking availability in Norfolk for both BAE
            and NASSCO. AR 3315, AR 3321–22.
       •    The administrative record shows that Navy personnel had email and telephone
            conversations discussing the decision to cancel the First Solicitation. AR 3325–34.
       •    The administrative record contains a memorandum to file summarizing the
            information that led the contracting officer to cancel the First Solicitation, which
            “made it clear that the only reason competition was not obtained was the restrictions
            of the dry-dock requirement.” AR 3323–24.

        Simply put, the market research that justified cancellation was not complicated. There
were only two capable potential offerors. One bid, the other did not. The reason that only one
potential offeror bid was dry dock availability. The contracting officer had at least two crucial
pieces of information in front of her indicating that the reason NASSCO did not bid on the First
Solicitation was the 10 percent docking requirement: 1) NASSCO’s own statement that dry dock
availability was the reason it did not bid; and 2) charts showing that it was not possible for
NASSCO to dry-dock the Bainbridge within the first 10 percent of its availability because the
USS Iwo Jima would still be occupying NASSCO’s single dry dock. This is all the market
research that was needed.

        Plaintiff’s attempt to analogize the market research here to the lack of market research in
Seventh Dimension is unavailing. Pl.’s MJAR at 17–18 (citing 160 Fed. Cl. at 25). Unlike the
instant protest, in Seventh Dimension, the Army could not point to any market research or
otherwise in the administrative record and, in fact, counsel for the government in that protest
conceded the lack of such research at oral argument. 160 Fed. Cl. at 21 (“The administrative
record, however, contains no such market research supporting the cancellation decision —
indeed, the government concedes that point as well.”). Here, market research existed, and it was
documented in the administrative record. In other words, as opposed to the facts of Seventh
Dimension, the Navy relied on more than “a mere hypothesis or conjecture that competition
likely would increase were the Solicitation cancelled.” Id. at 26. Rather, the contracting
officer’s decision was a “reasoned judgment based on evidence and facts contained in the
administrative record.” Id. (emphasis omitted).

       b.      Relaxation of the 10 percent docking requirement was a “substantial”
               amendment under FAR 15.206(e)

        FAR 15.206(e) further requires that, based on the above market research, the contracting
officer must in her judgment have concluded that the 10 percent docking requirement
amendment was “so substantial as to exceed what prospective offerors reasonably could have
anticipated, so that additional sources likely would have submitted offers had the substance of
the amendment been known to them . . . .” 48 C.F.R. § 15.206(e). Plaintiff asserts that this
substantiality requirement was not satisfied in this case. According to Plaintiff, the substantiality
requirement is not met as the Second Solicitation is essentially identical to the First Solicitation

                                                 13
because the “scope of work and terms and conditions remained substantially unchanged with
only minor revisions.” Pl.’s MJAR at 7. Moreover, Plaintiff argues that the only substantive
change—the relaxation of the 10 percent docking requirement—was not “so substantial as to
exceed what prospective offerors reasonably could have anticipated.” Id. at 16 (citing FAR
15.206(e)); see also Pl.’s Resp. at 11. Rather, Plaintiff contends that docking dates are routinely
moved and that amendments to the First Solicitation changed the start date for the availability;
therefore, NASSCO reasonably could have anticipated a change to the 10 percent docking
requirement Pl.’s MJAR at 19; Pl.’s Resp. at 12. The government and NASSCO, of course,
disagree with Plaintiff’s assertions, arguing that the change was so substantial that it could not
have been anticipated and was likely to increase competition. With regard to whether the change
could have been anticipated, NASSCO asks: “how could NASSCO or BAE have anticipated—
especially given the highly restrictive docking requirements of the Original Bainbridge RFP—
that the Navy would eventually provide that the inflexible dry-docking ‘10% rule will not be
strictly enforced allowing contractor flexibility to propose a later docking date. . . .’?” NASSCO
MJAR at 21. And with regard to whether the change likely would have increased competition,
NASSCO asserts that “[w]hile BAE . . . with its multiple dry-docks has always been able to
compete for the BAINBRIDGE DSRA—the reality is that these changes were unquestionably
substantial to NASSCO, directly impacting the shipyard’s ability to compete for and perform the
maintenance availability.” Id. at 22.

        Therefore, the critical question for the Court is whether the amendment relaxing the 10
percent docking requirement was so substantial that (1) it exceeded what prospective offerors
reasonably could have anticipated and (2) made it likely that additional sources would have
submitted offers had the substance of the amendment been known to them. In making this
determination, the Court is guided by the fact that the substantiality of the amendment “is a
matter of degree varying from one contract to another,” Saddler v. United States, 152 Ct. Cl. 557,
561 (1961), and that “[t]here is no exact formula . . . . Each case must be analyzed on its own
facts and in light of its own circumstances, giving just consideration to the magnitude and quality
of the changes ordered and their cumulative effect upon the project as a whole,” Wunderlich
Contracting Co. v. United States, 173 Ct. Cl. 180, 194 (1965). In short, “whether ‘an
amendment proposed for issuance’ is ‘so substantial’ . . . is not subject to any precise
mathematical analysis.” Seventh Dimension, 161 Fed. Cl. at 20 (citing Air-A-Plane Corp. v.
United States, 187 Ct. Cl. 269, 276 (1969)). For example, in some contexts, changing 85 percent
of the scope of work in a solicitation would be substantial, but if in a particular solicitation the
contracting officer thought offerors would anticipate such a change or that such a change would
not make it likely that additional sources would have submitted offers, then the change would not
reach the FAR 15.206(e) substantiality threshold.

        Turning to the instant procurement, based on the administrative record, the Court can
readily conclude that prospective offerors would not have anticipated the relaxation of the 10
percent docking requirement. First, one must look at what the 10 percent docking requirement
actually is—it is a contractual commitment that by approximately December 22, 2022, the
successful offeror will put the Bainbridge in dry dock in Norfolk, VA. Therefore, in order to bid
on the contract, a prospective offeror would need to have a dry dock large enough to
accommodate the Bainbridge available on or about December 22, 2022. Failure to have a dry
dock available could result in breach of the Bainbridge DSRA. So, while in a general sense, all

                                                14
contractors are aware that deadlines and timelines in government procurements shift, here the
docking milestone—given the limited availability of companies capable of doing the work and
having a dry dock that will fit the Bainbridge—is not a minor deadline that a contractor can work
around. In other words, bidding on the Bainbridge DSRA hoping that the time to commence
dry-docking was going to change would not have been a prudent course for a prospective
contractor to take. If NASSCO was the successful awardee but did not have its single dry dock
available by December 22, 2022, it would have found itself in breach of one of the major
requirements of the Bainbridge DSRA. See AR 2799 (listing major contract milestones).

         Second, while dates in government procurements may change, and it may be the case that
the Navy has upon occasion relaxed a 10 percent docking requirement, Plaintiff in its response
brief actually introduced evidence outside of the administrative record indicating that NASSCO
questioned whether the 10 percent docking requirement could be relaxed in two recent Navy
availabilities, and the Navy responded that it could not. ECF Nos. 39-1 at 3 and 39-2 at 2. In
response to NASSCO’s requests to relax the 10 percent docking requirement for these two recent
availabilities, the Navy explained it “will not remove the requirement to have the ship docked
within the first 10 percent of the contractual period” (ECF No. 39-1 at 3) and “the requirement to
drydock the ship within the first 10% of the availability will not be removed” (ECF No. 39-2 at
2). The Navy’s rejection of NASSCO’s previous requests to relax the 10 percent docking
requirement supports the notion that NASSCO, as the only “other offeror” in this procurement,
would not anticipate the change. This is further supported by an unrebutted 9 statement in a
declaration submitted by the government, which the Court takes judicial notice of, wherein
contracting officer Amy Caraway explains that “[t]ypically a contract requires that the ship be
put into dock within 10% of the days of the total availability duration . . . . The dry-dock period
is the first major milestone of the contract.” ECF No. 37-1 at ¶ 3. As such, at least in typical
cases, it seems the requirement that a ship be brought to dry dock within the first 10 percent of its
availability is standard in these procurements. In short, Plaintiff does not point to anything in the
record that would indicate that NASSCO or Plaintiff would have anticipated a relaxation of the
10 percent docking requirement. Instead, Plaintiff broadly suggests that dates and deadlines
often vary with ship availabilities, “[s]o, it is reasonable that bidders could have anticipated a
change to the docking start date.” Pl.’s MJAR at 19. However, changes to the start date of an
availability are not the same thing as the requirement that a ship must be dry-docked within the
first 10 percent of its availability.

        It appears that what Plaintiff is actually arguing is that it was possible that the 10 percent
docking requirement would be relaxed. However, the FAR uses the term “anticipated,” which is
not a synonym of “possible.” Rather, something is anticipated when it is “look[ed] forward to as
certain,” anticipate, MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY (11th ed. 2004),
“expect[ed] that something will happen,” anticipate, CAMBRIDGE DICTIONARY,
https://dictionary.cambridge.org/us/dictionary/english/anticipate (last visited Nov. 3, 2022), or
“[a]pprehended beforehand, looked for, expected,” anticipated, OXFORD ENGLISH DICTIONARY
(2d ed. 1989). So, while Plaintiff is correct that it was possible that the 10 percent docking

        9
           Indeed, Plaintiff not only does not rebut the Caraway declaration, it actually concurs with it by
referring to the 10 percent docking requirement as “a common requirement in MARMC ship repair
solicitations . . . .” Pl.’s MJAR at 31.

                                                     15
requirement might be relaxed, Plaintiff has offered nothing to demonstrate that such an
amendment is one that would have been certain, expected, or probable.

        Plaintiff attempts to analogize this case to Argencord Mach. & Equip., Inc. v. United
States, contending that it provides a good example of an amendment that could have been
anticipated and, therefore, not sufficiently substantial. 68 Fed. Cl. 167 (2005). In that case,
Judge Williams found that the protester “itself reasonably could have anticipated th[e]
amendment” allowing the use of an alternate material because the awardee had supplied similar
materials under an earlier contract. Id. at 175. As a result, she concluded that the amendment
was not “substantial” for purposes of FAR 15.206(e). Id. Here, however, Plaintiff has not
directed the Court to similar evidence. To the contrary, the only evidence Plaintiff has pointed
the Court to regarding anticipation of the 10 percent docking requirement amendment are
questionnaires Plaintiff appended to its own response brief that actually demonstrate that under
previous solicitations, the government refused to relax the 10 percent docking requirement. See
ECF Nos. 39-1 at 3 and 39-2 at 2. In other words, the only evidence to which Plaintiff has
directed the Court refutes—rather than supports—Plaintiff’s argument.

       In order to be “so substantial,” beyond needing to exceed what perspective offerors
reasonably could have anticipated, an amendment must also make it likely that additional sources
would have submitted offers had the substance of the amendment been known to them. It
appears obvious here that this requirement was met. The situation here is unique in terms of
additional sources because it is undisputed that there was only one additional source: NASSCO.
Thus, the reasonable likelihood must be judged based on whether NASSCO would have
submitted a proposal had it known the substance of the amendment. Several factors indicate that
it was more than reasonable for the contracting officer to conclude that relaxing the 10 percent
docking requirement was likely to cause NASSCO to submit a bid.

         First, the administrative record demonstrates that in response to the Sources Sought
Announcement, NASSCO indicated its intent to submit a bid for the Bainbridge DSRA:
“NASSCO-Norfolk plans to submit a proposal in response to the anticipated solicitation for the
FY22 USS BAINBRIDGE DSRA.” AR 54. Second, the administrative record indicates that the
only reason NASSCO did not end up submitting a proposal was because it could not comply
with the 10 percent docking requirement, as it did not have a dry dock available. AR 3339 (May
23, 2022, email from NASSCO to Navy reiterating the intent to no bid the Bainbridge DSRA
“due to not having a drydock available to support the period of performance”). Even if this was
not the case, the Navy’s conclusion that “the only reason competition was not obtained was the
restriction of the dry-dock requirement,” AR 3323, 10 was still reasonable based on the facts in
the administrative record regarding why NASSCO did not originally bid on the Bainbridge
DSRA and the market research conducted by the Navy regarding dry dock availability in
Norfolk. AR 3321 (chart showing Norfolk docking availabilities). Simply put, the Navy asked
NASSCO—the only other “additional source[]”—why it did not submit a proposal, and it
received a clear response: it had no “drydock available to support the period of performance.”
AR 3339. With this information in hand and its knowledge of Norfolk dry dock availability, it

       10
            See also AR 3306 (“BAINBRIDGE FY23 DSRA only received one bid (BAE Norfolk) due to
restrictive docking milestones that precluded NASSCO’s participation.”).

                                               16
was reasonable to conclude that NASSCO “likely would have submitted an offer” if the 10
percent docking requirement was amended.

        Plaintiff attempts to get around the relatively simple conclusion that the amendment was
so substantial that it could not have been anticipated and was likely to increase competition by
pointing the Court to other cases in which an amendment was determined not to be requisitely
substantial. For instance, Plaintiff asks the Court to look at Golden Manufacturing wherein
Judge Bush concluded that an amendment that made changes to “the material type,
manufacturing process, evaluative quantities, and included additional variety in each lot” was not
sufficiently substantial. Pl.’s MJAR at 18 (citing Golden Mfg. Co., Inc., 107 Fed. Cl. at 277–
280). In general terms, Plaintiff’s main point appears to be that because the language of the First
Solicitation remained virtually intact and the only change was the addition of a mere 26 words
relaxing the 10 percent docking requirement and the deletion of the dry dock dates on the Second
Solicitation’s execution milestones and key event dates chart, this per se could not have been
substantial. AR 10684, 11336, 11341. In other words, if changing “the material type,
manufacturing process, evaluative quantities, and included additional variety in each lot” was not
a substantial change in Golden Manufacturing, then, according to Plaintiff, simply changing the
docking requirement here also could not have been a substantial change. However, this
argument ignores Judge Bush’s reasoning that the alterations were not a substantial change
because “[i]t [was] not reasonable to presume that a different field of offerors would have
responded to the Solicitation if the modest price increases inherent in Amendment 15 had been
disclosed . . . .” Golden Mfg., 107 Fed. Cl. at 278. Thus, to paraphrase Judge Bush, it is
eminently reasonable to presume that a different field of offerors (NASSCO) would have
responded to the First Solicitation if the 10 percent docking requirement was relaxed.

        In fact, in this case, it appears that the types of changes to the First Solicitation Plaintiff
argues would be sufficiently substantial, would not have led NASSCO to bid on the Bainbridge
DSRA. As long as the Bainbridge needed to be placed in dry dock no later than approximately
December 22, 2022, NASSCO could not bid on the Bainbridge DSRA because another ship (as
discussed below) was occupying its only dry dock in Norfolk capable of dry-docking the
Bainbridge. NASSCO did not decline to bid on the Bainbridge because of the scope of work;
NASSCO had just bid on a much more complex availability on another Arleigh Burke class
destroyer that also required dry-docking in Norfolk. That destroyer’s availability and 10 percent
docking requirement fell within a window during which NASSCO’s dry dock was available.
The Bainbridge DSRA and window to begin dry-docking simply did not. Therefore, the
amendment that was so substantial as to allow NASSCO to submit an offer was the relaxation of
the 10 percent docking requirement.

        Finally, in the alternative, Plaintiff argues that relaxing the 10 percent docking
requirement was not actually what permitted NASSCO to bid on the Second Solicitation;
therefore, even to the extent that the Navy followed FAR 15.206(e), its conclusion that relaxing
the 10 percent docking requirement would likely increase competition was unreasonable. As
explained by Plaintiff, NASSCO only has one drydock capable of housing a ship the size of the
Bainbridge. See Pl.’s Resp. at 10 n.6; NASSCO’s Cross-MJAR at 9 n.8. However, Plaintiff
points out that NASSCO submitted a proposal for a contract on the Ross, also an Arleigh Burke
class guided-missile destroyer, with an availability that also begins on November 28, 2022. AR

                                                  17
3312. Proposals for the Ross were due in April 2022, as opposed to May 23, 2022, for the
Bainbridge. Pl.’s Resp. at 18. BAE submitted the lowest price, technically acceptable proposal
for the Ross, and was awarded the contract. Id. at 22; AR 3312. Because NASSCO only has one
dry dock capable of fitting an Arleigh Burke class destroyer, Plaintiff asserts that the real reason
NASSCO did not bid on the Bainbridge DSRA was because it bid on and expected to win the
Ross contract:

       Based upon the critical timing of events, it is clear that NASSCO’s comment about
       “not having a dry-dock available to support the period of performance” referred to
       the fact that NASSCO would not have a dry dock for USS BAINBRIDGE because
       the USS ROSS would occupy its dry dock during the same period of performance
       (in the beginning). It had nothing to do with the timing to get the USS
       BAINBRIDGE into dock within the 10% docking requirement based on the current
       schedule of the USS IWO JIMA.

Pl.’s Resp. at 19. Plaintiff, therefore, argues that the relaxation of the 10 percent docking
requirement could not have been the “substantial change” that actually brought NASSCO into
the competition. Instead, Plaintiff contends that NASSCO made a choice to bid on the Ross
availability and not the Bainbridge availability. The real “change” that would increase
competition for the Navy here was simply NASSCO not being awarded the Ross contract.

         At first blush Plaintiff’s argument appears to be a convincing one. However, at oral
argument, NASSCO, with information from the administrative record that was clearly before
Navy decisionmakers, explained why Plaintiff’s argument was incorrect. See AR 3312. As
NASSCO explained, it is the current drydocking of the Iwo Jima in NASSCO’s dry dock that
makes it impossible for NASSCO to repair the Bainbridge if the Bainbridge DSRA contains the
restrictive 10 percent docking requirement. The Ross contract, even though it also has a 10
percent docking requirement and begins its availability on the same day as the Bainbridge
DSRA, is not, in fact, impacted by the dry-docking of the Iwo Jima. This is due to the different
availability lengths for the Ross and the Bainbridge. The availability for the Bainbridge is to last
from November 28, 2022, until August 3, 2023 (249 days). AR 2799. Therefore, the Bainbridge
would have to be drydocked by no later than December 22, 2022, which would mean that the
Iwo Jima may still be occupying NASSCO’s drydock on the last possible day that the Bainbridge
would need to enter dry dock if the 10 percent docking requirement is in place. The Iwo Jima is
scheduled to be in until at least mid- to late-December 2022. Pl.’s Resp. at 13 n. 8. Although the
Ross availability is also scheduled to begin on November 28, 2022, and has a 10 percent docking
requirement, its availability is scheduled to last 515 days, meaning that it could be placed in dry
dock as late as January 18, 2023, after the Iwo Jima is scheduled to leave NASSCO’s dry dock.
See Arg. Transcript at 74:11–76:18. In short, the last day to place the Ross in dry dock occurs
considerably later than the last day that the Bainbridge must be placed in dry dock if the 10
percent docking requirement is in place, and this explains why NASSCO was able to bid on the
Ross but not on the Bainbridge.

       In sum, the Court finds that Plaintiff has not demonstrated that the relaxation of the 10
percent docking requirement was not a substantial amendment under FAR 15.206(e).

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       3.      Plaintiff has Not Demonstrated that the Navy’s Cancellation Decision was
               Based on Pretext or Bad Faith

        Although not delineated as such in its table of contents or in the headings and
subheadings within its brief, it appears that within its argument that the Navy’s use of FAR
15.206(e) did not have a reasonable basis, Plaintiff also asserts that the Navy’s invocation of
FAR 15.206(e) was a pretextual reason to cancel the First Solicitation in order to ensure that
Plaintiff was not awarded the Bainbridge DSRA. Plaintiff’s argument is that the Navy worked
backward from a pre-determined result when it decided to invoke FAR 15.206(e) to cancel the
First Solicitation in order to distribute the ship repairs in Norfolk between Plaintiff and NASSCO
and thus was determined to award the Bainbridge DSRA to NASSCO. Pl.’s MJAR at 22 (“All
[the Navy] really wanted . . . was to receive a proposal from NASSCO so it could award the USS
BAINBRIDGE to NASSCO, after having awarded the USS ROSS to BAE.”). As proof of this
pretextual decision-making, Plaintiff directs the Court to the Navy’s consideration of three
courses of action (“COAs”) the Navy considered taking with regard to the Ross availability that
allegedly demonstrate that the Navy was simply trying to award the Bainbridge DSRA to
NASSCO by cancelling the First Solicitation. AR 3305–3312. Despite its attempts, however,
Plaintiff fails to demonstrate that the Navy’s cancellation of the First Solicitation was pretextual.

        The evidence Plaintiff offers to support its pretext argument are the COAs related to the
Navy’s concerns with awarding Plaintiff the Ross availability. Apparently, the Navy had
“concerns with BAE’s performance” and was uncertain about Plaintiff being awarded contracts
to work on both the Ross and the Bainbridge at the same time. See AR 3305. The Navy thus
considered, but rejected, three alternatives for either cancelling or reopening the Ross contract.
AR 3305–3312. Within the discussion of these three alternatives, the Navy also mentions that it
could revise the solicitation for the Bainbridge “to provide docking milestone flexibility and re-
release in order to obtain competition.” AR 3306. But nothing in these COAs seems to indicate
pretext or bad faith on the part of the Navy. Rather, these seem simply to be discussions of the
fact that Plaintiff was just awarded one major availability, was the only competitor for another,
and the Navy had some concerns with Plaintiff’s past performance. And even though options for
awarding NASSCO the Ross contract were discussed, those options were rejected in favor of an
option that created more competition for the Bainbridge DSRA. In other words, the Navy chose
none of the alternatives discussed (including canceling the award and awarding NASSCO a sole
source contract for the Ross), moved forward with awarding Plaintiff that contract, and chose an
alternative that allowed Plaintiff to continue to compete for the Bainbridge DSRA along with
NASSCO. Any hint of pretext in these discussions likely relates to the simple fact that there are
only two competitors for both the Ross and the Bainbridge contracts; therefore, while one could
argue that it appears the Navy is somehow favoring NASSCO, that appearance is just a reflection
of the fact that NASSCO is literally the only other competitor for both the Ross and Bainbridge
contracts.

        In addition, much of the factual support that Plaintiff points to in support of its pretext
argument and the reason that the Navy cancelled the First Solicitation all relate to achieving
more competition. The increase in competition is what makes Plaintiff’s pretext argument
different from the typical case in which a protestor alleges pretext or bad faith. Normally, if an
agency acts in a manner that is pretextual, it is attempting to avoid competition. Here, the

                                                 19
Navy’s stated purpose for cancellation was to increase competition. See, e.g., AR 3323.
Nonetheless, Plaintiff argues that the record shows that cancellation was “a mere pretext to make
an award to NASSCO,” the exact opposite of real competition. Pl.’s Resp. at 7. However, if the
Navy really wanted to ensure that Plaintiff and NASSCO each received one of the availabilities,
it could have done so by awarding NASSCO a sole source contract for one of the two
availabilities. See 48 C.F.R. § 15.002. Instead, the Navy chose to proceed with a competitive
procurement process for the Bainbridge DSRA.

         Furthermore, even to the extent that the record evidence may point toward pretext or bad
faith, that simply is not enough for Plaintiff to meet its burden on a pretext claim. There is a
“strong presumption that government contract officials exercise their duties in good faith.” Am-
Pro Prot. Agency, Inc. v. United States, 281 F.3d 1234, 1239 (Fed. Cir. 2002); see also Sanders
v. United States Postal Serv., 801 F.2d 1328, 1331 (Fed. Cir. 1986) (“[T]here is a strong
presumption in the law that administrative actions are correct and taken in good faith.”). In order
to defeat this presumption, a protestor must present “‘well-nigh irrefragable proof’” that the
government officials did not act in good faith. Croman Corp. v. United States, 724 F.3d 1357,
1364 (Fed. Cir. 2013) (quoting Knotts v. United States, 128 Ct. Cl. 489, 492 (1954)); see also
Torncello v. United States, 231 Ct. Cl. 20, 45 (1982) (“[T]he government, unlike private parties,
is assumed always to act in good faith, subject only to an extremely difficult showing by the
plaintiff to the contrary.” (emphasis added) (citation omitted)). Here, the portions of the
administrative record Plaintiff asserts support its pretext argument do not surmount this high
burden.

        Another case involving FAR 15.206(e) is illustrative of this point. In Madison Services,
Inc. v. United States, the protestor alleged that FEMA used “the prospect of enhanced
competition as pretext . . . to divert the work to the incumbent contractor . . . .” 92 Fed. Cl. at
130. Moreover, the protestor in Madison Services, like Plaintiff, attempted to avoid making a
bad faith argument, suggesting that pretext could be found without declaring that the government
acted in bad faith. Compare id. (“[P]laintiff assiduously avoids using the words ‘bad faith’
except when arguing that bad faith is ‘not essential to establish that a cancellation was a
pretext.’”) with Pl.’s Resp. at 15 (“Pretextual reasons may be an element of bad faith, but not all
pretextual reasons amount to bad faith.”). Judge Block rejected the protestor’s attempt to walk
the tightrope of alleging pretext without bad faith, noting that the two terms are used
interchangeably, “[a]nd bad faith is precisely what plaintiff alleges.” Madison Servs., Inc., 92
Fed. Cl. at 130. The Court agrees with Judge Block and finds that Plaintiff’s pretext argument is
no different than a claim that the government acted in bad faith, and Plaintiff must meet the high
standard of clear and convincing evidence.

         As discussed above, Plaintiff does not meet that burden. The Navy’s consideration and
rejection of COAs that would have cancelled or reopened the award of the Ross availability to
Plaintiff does not rise to the level of clear and convincing evidence that it was acting in bad faith
or that the cancellation was pretext to reset the bidding process so NASSCO could win. Here,
the Navy’s decision to cancel the First Solicitation meets the standards of FAR 15.206(e) for the
reasons explained above. Plaintiff has not identified any evidence in the administrative record
that the Navy’s decision to cancel the First Solicitation was motivated by anything other than its
desire to have both companies capable of performing the Bainbridge DSRA compete for the

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Bainbridge DSRA. Therefore, the Court concludes that Plaintiff has failed to present “well-nigh
irrefragable proof” that the Navy acted pretextually or in bad faith.

        4.      Plaintiff’s Claim Regarding its Transmission of CCPD is Not Ripe

        Because Plaintiff was the only offeror under the First Solicitation, DFARS 252.215-7008
required Plaintiff to provide the Navy with Certified Cost and Pricing Data (“CCPD”) 11 so that
the Navy could “determine whether the price is fair and reasonable.” DFARS 252.215-
7008(a)(1). Plaintiff contends that the Navy’s possession of its CCPD will place Plaintiff at a
disadvantage in the competition under the Second Solicitation, because the “Navy will be able to
examine and consider BAE[’s] costs and pricing in much greater detail than it can for any other
offeror.” Pl.’s MJAR at 28–33. Additionally, Plaintiff suggests that if it wanted to make any
pricing changes in response to the Second Solicitation, the Navy could question any such
changes and be able to undertake a de facto price realism analysis. Id. at 29.

        In response, the government asserts that Plaintiff’s argument regarding the CCPD is not
ripe for review because it is based on speculation as to how the Navy may or may not use the
CCPD in evaluating proposals under the Second Solicitation. Gov.’s Cross-MJAR at 20–21.
The government further explains that the Navy is required to evaluate all proposals under the
Second Solicitation based on the merits of each proposal. Id. at 22. Any assumption that the
Navy will act improperly runs contrary to the presumption that government officials carry out
their duties appropriately. Id. at 24.

         At oral argument, Plaintiff essentially conceded that this claim is not yet ripe. Arg.
Transcript at 108:25–109:2; 110:3–15. To any extent that Plaintiff did not concede this
argument, the Court finds that simply assuming, without more, that the Navy’s possession of
Plaintiff’s CCPD from the First Solicitation will somehow negatively impact Plaintiff in the
Second Solicitation does not constitute a justiciable injury. “In considering the justiciability of a
bid protest, the United States Court of Appeals for the Federal Circuit has held, ‘[a] claim is not
ripe for judicial review when it is contingent upon future events that may or may not occur.’”
Texas v. United States, 134 Fed. Cl. 8, 17 (2017) (quoting Sys. Application & Techs., Inc. v.
United States, 691 F.3d 1374, 1383 (Fed. Cir. 2012)). Here, Plaintiff’s claim regarding the
CCPD is clearly not yet justiciable. Plaintiff speculates that the Navy’s possession of its CCPD
will place it at a disadvantage in competing for the Second Solicitation, because the Navy may
improperly use the CCPD. See Pl.’s MJAR at 2 (“Does BAE NSR’s submission of [CCPD]
under the First Solicitation . . . place BAE NSR at a competitive disadvantage under the Second
Solicitation?”). But “anticipation of a future procurement violation is not sufficient to make a
claim ripe.” Texas, 134 Fed. Cl. at 17. If the Navy does in fact conduct a de facto price realism
analysis on Plaintiff’s proposal under the Second Solicitation, or otherwise improperly uses the
CCPD, the time for protesting such violations is after they actually occur. Plaintiff’s conjecture
that it may be disadvantaged in the Second Solicitation by the Navy’s possession of its CCPD is
not properly before this Court in this bid protest; therefore, this claim is hereby dismissed. See
RCFC 12(h)(3).

        11
           The government notes that technically the Navy only received cost and pricing data (not
certified cost and pricing data) because the data was never certified. Gov.’s Cross-MJAR at 22 n.10.
Whether or not the data is certified is not relevant to the Court’s discussion here.

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       5.      Plaintiff is Not Entitled to Injunctive Relief

        The Federal Circuit has explained that the following factors must be considered before
entering a permanent injunction: “(1) the plaintiff has succeeded on the merits of the case; (2) the
plaintiff will suffer irreparable harm if the court withholds injunctive relief; (3) the balance of
hardships to the respective parties favors the grant of injunctive relief; and (4) the public interest
is served by a grant of injunctive relief.” ACI Techs., Inc. v. United States, 161 Fed. Cl. 58, 87
(2022) (quoting Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (citing
PGBA, LLC v. United States, 389 F.3d 1219, 1228–29 (Fed. Cir. 2004)). “Proving success on
the merits is a necessary element for a permanent injunction, but we may balance the remaining
three Centech permanent injunction factors—irreparable harm, balance of hardships, and public
interest—when deciding whether to grant or deny injunctive relief.” Seventh Dimension, 160
Fed. Cl. at 34 (emphasis added) (quoting Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 999
& n.13 (Fed. Cir. 2018)) (internal marks omitted). Here, because Plaintiff has not succeeded on
the merits, the Court need not balance the three other factors, and Plaintiff is not entitled to
injunctive relief. ACI Techs., 161 Fed. Cl. at 87 (2022).

                                          CONCLUSION

        For the reasons set forth above, Count II of Plaintiff’s complaint is DISMISSED for lack
of subject matter jurisdiction; Plaintiff’s motions for judgment on the administrative record and
for a permanent injunction are DENIED; and Defendant-Intervenor’s cross-motion for judgment
on the administrative record is GRANTED. In addition, insofar as the government’s cross-
motion for judgment on the administrative record argues that its decision to cancel a procurement
cannot be in violation of FAR 15.206(e), even if that is the ground invoked for cancelling the
solicitation, the government’s motion is DENIED; in all other respects the government’s motion
is GRANTED. The Clerk shall enter judgment accordingly.

IT IS SO ORDERED.

                                                       s/ Zachary N. Somers
                                                       ZACHARY N. SOMERS
                                                       Judge

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