Court Opinion

ID: 4549143
Source: CourtListenerOpinion
Date Created: 2020-07-17 16:01:38.996918+00
Date Added: 2024-06-11T09:12:40.746289
License: Public Domain

Case 1:17-cv-01898-EGB Document 41 Filed 01/30/20 Page 1 of 2

      In the United States Court of Federal Claims
                        Nos. 20-120C & 20-150C (consolidated)
                                 (Filed: June
                          Nos. 17-1898T,       9, 2020) 17-2023T
                                            17-2022T,
                              (Re-filed: July 17, 2020)1
                                    (Filed: January 30, 2020)
     **************************
* * *QUANTICO
      * * * * * * TACTICAL
                  * * * * * * *INC.,
                                ********
                                                                        Bid Protest; Pre-Award
                                     Plaintiff,                         Bid Protest; Assertions of
DILLON TRUST COMPANY LLC, et al.,                                       Bias; Motion to Complete
      v.                                                                and Supplement
                             Plaintiffs,                                Administrative Record;
      THE UNITED STATES,                                                Limited Discovery
v.
                                     Defendant,
      and
THE UNITED STATES,
      ATLANTIC DIVING SUPPLY, INC.
                             Defendant.
                                     Intervenor-Defendant.
* * ** ** ** ** ** *********** ** ** ** ** ** ** ** ******* ** ** * *
      UNIFIRE, INC.,
                                                ORDER
                                     Plaintiff,

      The parties filed a joint motion on January 29, 2020, to extend the
      v.
discovery schedule. For good cause shown, the court grants the parties’ joint
    THEand
motion  UNITED
            adoptsSTATES,
                   the parties’ proposed amended schedule as follows:
                                     Defendant.
           1.      The parties shall complete all fact discovery by February 14,
                   2020.
 1 Pursuant to the Protective Order entered in this case, this opinion was
        2. for fourteen
 held open      The parties
                         daysshall exchange
                              during which thetheparties
                                                   identity  of propose
                                                         could  experts to
                                                                         under RCFC
 chambers any26(a)(2)(A)
                  appropriateand
                               redactions.   Plaintiff
                                  written reports       proposed
                                                    under           certain
                                                            RCFC 26(a)(2)(B)    on or
 redactions, in which the government and intervenor do not object.
 Thus, for goodbefore   February
                 cause shown,  we 18, 2020.
                                   adopt plaintiff’s proposed redactions.
 Those redactions are indicated by closed brackets below.
           3.      The parties shall exchange rebuttal expert disclosures and
                   rebuttal expert reports on or before March 6, 2020.
                                                  1

           4.      The parties shall complete all expert discovery on or before
  **************************

  Daniel R. Forman, Washington, D.C., with whom were Anuj Vohra, and
Rina M. Gashaw, for plaintiff.

  Doug Hoffman and Mariana Teresa Acevedo, Trial Attorneys, United
States Department of Justice, Commercial Litigation Branch, Civil
Division, Washington, DC, with whom were Martin F. Hockey, Jr., Deputy
Director, Robert E. Kirschman, Jr., Director, and Joseph H. Hunt, Assistant
Attorney General, for defendant.

  Paul F. Khoury, Washington, DC, with whom were John R. Prairie,
Kendra P. Norwood, and J. Ryan Frazee, for intervenor-defendant.

                       OPINION AND ORDER

      Pending is plaintiff Quantico Tactical, Inc.’s (“Quantico”) March
  12, 2020 motion to supplement and complete the administrative
  record, along with its request to take discovery from the United States
  and the intervenor, which plaintiff believes will be probative of its
  allegations of bad faith and bias. The motion is fully briefed, and
  telephonic oral argument was held on June 4, 2020, at which point we
  announced that we will grant in part plaintiff’s motion to supplement
  and complete the administrative record and deny the motion in all
  other respects. We announce our reasons here.

                            BACKGROUND

      On November 16, 2018 the Defense Logistics Agency (“DLA”)
  issued Solicitation No. SPE8EJ-18-R-0001 (“RFP”) for the Special
  Operations Equipment (“SOE”) Tailored Logistics Support (“TLS”)
  Program, with an original proposal deadline of January 8, 2019, which
  was later extended to January 18, 2019. Plaintiff submitted a timely
  proposal. Nine months later, DLA informed Quantico that it was
  being excluded from the competitive range.

     On December 23, 2019, Quantico submitted a bid protest to the
  Government Accountability Office (“GAO”). Unsatisfied with the
  agency’s production of documents at GAO, Quantico withdrew its
  GAO protest and filed the present action on February 3, 2020.
  Quantico’s complaint recites that Atlantic Diving Supply, Inc.
  (“ADS”), the intervenor here, settled several False Claims Act
  (“FCA”) claims which involved allegations that ADS and its owners

                                    2
committed fraud, rigged bids, and bribed DLA officials in order to
gain preferential treatment under the SOE TLS program. On February
24, 2020, another offeror excluded from the competitive range,
Unifire, Inc. (“Unifire”), filed a protest here, which was subsequently
consolidated with this case as the lead. On February 27, 2020, one of
the offerors in the competitive range, ADS, filed a motion to
intervene, alleging that Quantico’s protest implicated its own interests
in remaining in the competitive range. Concurrently, on February 27,
2020, the AR was filed. We granted intervention on March 3, 2020.

    On March 12, 2020, Quantico moved to supplement the
administrative record (“AR”), with materials attached to its filing and
to take limited discovery. Specifically, Quantico seeks to supplement
the AR with the district court FCA complaint and settlement
agreements. See Ex. 48, 49 (ECF No. 30-3). Quantico also seeks to
supplement with a declaration of Quantico’s Founder and Chief
Executive Officer, David Hensley, in which he raises allegations of
bias and retaliation by DLA against Quantico in the current
procurement. See Ex. 1 (ECF No. 30-2). Lastly, Quantico seeks to
supplement with price analysis and evaluation materials “evincing the
government’s consideration of ADS fraud.” Pl.’s Mot. to Supp. 8.

    In addition, Quantico seeks three categories of discovery: (1)
requests for production regarding bias and bad faith; (2) depositions
of three individuals who Quantico claims were “instrumental in the
SOE TLS Program”; and (3) a handful of interrogatories which
Quantico argues will explain some of the “most troubling aspects of
the SOE TLS procurement process[.]” Pl.’s Mot. to Supp. at 33-36.

    On March 20, 2020, ADS moved for disqualification of Latham &
Watkins (“Latham”) as counsel for Quantico because the firm had
previously represented ADS in what it alleged was a related matter.
On May 1, 2020, we granted ADS’s motion. Subsequently, on May
11, 2020, Quantico filed a motion to substitute Crowell & Moring
LLP for Latham as counsel in this case. The court then convened a
status conference on May 26, 2020 to inquire whether new counsel
wished to amend plaintiff’s request to supplement. New counsel
declined and asked the court to decide the motion as it was filed.

   We held telephonic oral argument on plaintiff’s motion to
supplement on June 4, 2020. We announced at the end of oral
argument that we would deny the motion to supplement and complete

                                   3
the administrative record with the exception only of two documents
mentioned below.

                            DISCUSSION

I.     Supplementing the Administrative Record

    Bid protests in this court are conducted under the standards set
forth in the Administrative Procedures Act. 28 U.S.C. § 1491(b)(1)(4)
(2012). Supplementation of the record is warranted only when “the
omission of extra-record evidence precludes effective judicial
review.” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374,
1380 (Fed. Cir. 2009). As such, “the parties’ ability to supplement
the administrative record is limited[,]” and “the focal point for judicial
review should be the administrative record already in existence, not
some new record made initially in the reviewing court.” Id. at 1379
(quoting Camp v. Pitts, 411 U.S. 138, 142-43) (1973).

    The administrative record, however, may be insufficient and thus
supplementation may be warranted when it is missing “relevant
information that by its very nature would not be found in an agency
record-such as evidence of bad faith, information relied upon but
omitted from the paper record, or the content of conversations.”
Inforeliance Corp. v. United States, 118 Fed. Cl. 744, 747 (2014)
(quoting Orion Int’l Techs v. United States, 60 Fed. Cl. 343-44 (2004)
(footnotes omitted)).

    Quantico argues that the DLA’s record is incomplete in five ways
and seeks to supplement and complete the record with materials that
allegedly show a history of DLA’s bad faith, bias, and retaliation
against Quantico. First, the AR as filed includes a December 4, 2019
memorandum titled “Pre-Negotiation Briefing Memorandum/
Competitive Range Determination Special Operations Equipment
Tailored Logistics Support,” Pl.’s Mot. to Supp. at 34, (ECF No. 30-
1); AR Tab 53, which indicates that it had two attachments:
Attachment 1 PEL [“Price Evaluation List] Outliers All Offers; and
Attachment 2 PEL Outliers and Objectives – Competitive Range.
Quantico argues that because the stated purpose of this memorandum
was to determine which offerors are in the competitive range and to
define the negotiation objectives in order to conduct discussions with
offerors, the attachments should be included in the AR.

                                    4
       In response, the government argues that the attachments are
   wholly irrelevant to this court’s inquiry because they were generated
   to facilitate negotiations with the offerors selected for the competitive
   range. Moreover, the government argues that the spreadsheets at issue
   merely contain slight variations of pricing analysis that is already
   included in the AR. Because these attachments appear to be
   documents that the agency relied on in its evaluation of offerors, we
   direct the government to supplement the AR with these two
   attachments.

       Second, Quantico argues that the AR does not include
   documentation of DLA’s substantive price evaluation other than a
   copy of the spreadsheet used by evaluators to make calculations. In
   response, the government asserts that the spreadsheet itself allows
   Quantico to examine whether “offerors met the requirement to quote
   a minimum of 90% of the required items listed,” confirms that DLA
   “compar[ed] offerors to each other,” and establishes that DLA
   “calculate[ed] the ‘Total Evaluated Price.’” Def.’s Opp. to Pl.’s Mot.
   to Supp. at 14. We agree. Quantico has sufficient information with
   respect to the price evaluation actually conducted.

        Third, Quantico argues that “[t]he AR does not include any drafts
   or workpapers relating to the Government’s substantive evaluation of
   proposals,” which are “especially important in this case” because they
   involve “credible and well-grounded allegations of bias and bad faith
   . . . .” Pl.’s Mot. to Supp. at 41. We agree with the government that
   these appear to be internal communications and draft documents
   amounting to deliberative process materials.

       Fourth, Quantico argues that there is an unaccounted and
   unexplained six-month gap2 in the AR and that there are “no
   documents that address or even recognize the agency’s decision-
   making during this time period.” Pl.’s Mot. to Supp. at 42. It does not
   reference any particular documents, however, which were improperly
   excluded. The government explains that the evaluations completed in
   June 2019 were only a part of the competitive range determination
   process and that appropriate review had to occur after the competitive
   range determination was prepared. As this procurement has an
   estimated $13 billion minimum value, we find the six-month gap in

2 The AR shows that the evaluation of offerors concluded in June 2019,
however, the technical evaluation materials and competitive range
determination are dated on the same day, December 4, 2019.

                                      5
   documents during which DLA prepared and reviewed competitive
   range determination material does not create a presumption of an
   omission.

      Fifth, Quantico argues that the AR should include “discussion of
   [ADS’s] FCA settlements or the underlying fraud allegations, or
   consideration of the issues that these cases raise.” Pl.’s Mot. to Supp.
   at 43. We disagree. As we discuss below in connection with
   Quantico’s request for discovery, ADS’s prior FCA settlements are
   beyond the scope of this procurement.

       We concluded that the AR as filed should be supplemented only
   with respect to the two attachments to the “Pre-Negotiation Briefing
   Memorandum/ Competitive Range Determination Special Operations
   Equipment Tailored Logistics Support” memorandum as this
   information was relied upon but omitted from being included in the
   AR.

   II.    Discovery Based on Allegations of Bias and Bad Faith

       Quantico alleges that this procurement has been tainted with
   DLA’s bias and retaliation resulting from Quantico’s requests that
   DLA take appropriate action based on ADS’s alleged procurement
   fraud. Specifically, Quantico argues that from 2017 to 2019, it
   repeatedly asked DLA “to consider suspension or debarment of ADS
   to protect the Government from ADS and its documented fraud
   against DLA.” Pl.’s Mot. to Supp. 18. Quantico asserts that at first
   the Deputy Inspector General (“IG”) responded favorably to Mr.
   Hensley and even met in person with him. Quantico was eventually
   informed, however, that no investigation or debarment action
   regarding ADS would move forward. Moreover, Quantico asserts that
   after ADS’s FCA case was settled “the Deputy IG significantly
   changed his demeanor toward Quantico.3” Id. at 19.

      Mr. Hensley alleges unequal treatment regarding the award of task
   orders to ADS for non-conforming supplies at higher prices and that
   “DLA substantially downgraded Quantico’s CPAR rating under the

3 For example, Quantico provides that when Mr. Hensley asked to meet with
the Deputy IG concerning the FCA settlement, the Deputy IG responded,
“Neither the Inspector General or I will be available to meet with you on
Tuesday, August 27, 2019. I recommend you submit your new complaint to
our hotline.” Pl.’s Mot. to Supp. at 19.

                                      6
SOE TLS program despite Quantico’s objectively exceptional
performance and the failure of DLA to identify a single concrete
incident warranting the lower CPAR rating.” Id. at 20. Quantico
includes that DLA’s past performance evaluation is “concrete
evidence of bias against Quantico.” Id. at 10.

    Agency decisions are entitled to the “presumptions of regularity
and of good faith conduct[.]” Inforeliance, 118 Fed Cl. at 747. Thus,
“allegations of bad faith must rest on a strong evidentiary footing to
overcome” the presumption. Beta Analytics International, Inc. v.
United States, 61 Fed. Cl. 223, 226 (2004) (citations omitted).
“[A]llegations of bad faith must be based on hard facts in order to
justify . . . supplementation of the administrative record.” Int’l Res.
Recovery, Inc. v. United States, 61 Fed. Cl. 38, 43 (2004).

    In Beta Analytics, this court established a two-part test for a
plaintiff seeking discovery based on bad faith allegations. Id. First, a
plaintiff must “make a threshold showing of either a motivation for
the Government employee in question to have acted in bad faith or
conduct that is hard to explain absent bad faith.” Id. (emphasis
added). “Second, the plaintiff must persuade the Court that discovery
could lead to evidence which would provide the level of proof
required to overcome the presumption of regularity and good faith.”
Id. Moreover, “[i]nnuendo or suspicion is not enough to demonstrate
bad faith and thus to justify discovery.” Id. (citing Orion, 60 Fed. Cl.
at 344).

    In support of its argument, Quantico cites to Starry Assocs. v.
United States, where this Court granted discovery in a case where “a
previously-recused agency official stepped in to cancel a solicitation
after the agency was unsuccessful in multiple efforts to award the
contract to his former employer.” 125 Fed. Cl. 613, 623 (2015). In
Starry, this Court found hard evidence of bias in the AR in the form
of signed statements of the previously-recused agency official whom
had exerted undue influence over the procurement process. Id. at 620.
Quantico also cites to Pitney Bowes Gov’t Solutions v. United States,
where this Court also granted limited discovery to examine “a
friendly, personal relationship between [* * *], a member and
chairperson of the Technical Evaluation Panel (“TEP”) that
considered the competitors’ offer, and Donald Dilks,” a vice president
of the awardees’ subcontractor. 93 Fed. Cl. 327, 330 (2010).

                                   7
       Here, Quantico provides neither a motivation for any particular
   government employee to have acted in bad faith nor conduct that is
   hard to explain absent bad faith. In fact, Quantico does not point to
   any clear evidence of bias other than a “change in demeanor” from
   DLA officials towards Mr. Hensley, which we find totally insufficient
   as evidence of bias. The past performance evaluation challenge goes
   straight to the merits of the underlying bid protest, which can be
   evaluated without considering bad faith, discussed in more depth
   below.

       We find that Quantico’s allegations are the type of “[i]nnuendo or
   suspicion” that this Court has deemed insufficient to justify discovery.
   Beta Analytics, 61 Fed. Cl. at 226. DLA has offered its explanation
   for the decision to omit Quantico from the competitive range, which
   it attributes to [

       ].4 AR Tab 51 at 3577, 3580-81. Quantico’s disagreement with
   the agency’s conclusions is not evidence of bad faith, but will be
   tested when the merits of the protest are addressed. The request for
   supplementation and discovery must be denied.

                              CONCLUSION

       Based on the foregoing, we grant plaintiff’s motion to complete
   the administrative record only with respect to attachments to the “Pre-
   Negotiation     Briefing    Memorandum/         Competitive     Range
   Determination Special Operations Equipment Tailored Logistics
   Support” memorandum. The motion is denied in all other respects.

                                                 s/Eric G. Bruggink
                                                 Eric G. Bruggink
                                                 Senior Judge

4 The government contends that Quantico’s proposal lacked plans to meet
the [                        ] and lacked [                          ]. See
AR Tab 51 at 3581-83. Thus, it was “Quantico’s failure to show it could
meet the solicitation’s requirements that precluded its inclusion in the
competitive range . . . .” Def.’s Opp. to Pl.’s Mot. to Supp. at 29.

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