Court Opinion

ID: 4706519
Source: CourtListenerOpinion
Date Created: 2021-07-26 21:04:17.606947+00
Date Added: 2024-06-11T08:06:37.202948
License: Public Domain

In the United States Court of Federal Claims
                                          No. 21-1138C
                                (Filed Under Seal: June 25, 2021)
                            (Reissued for Publication: July 26, 2021) *

***************************************
SAGAM SECURITE SENEGAL,               *
                                      *               Preaward Bid Protest; Challenge to
                  Plaintiff,          *               Cancellation of Solicitation and
                                      *               Resolicitation; Mootness; Cross-Motions for
v.                                    *               Judgment on the Administrative Record;
                                      *               Improper Disclosure of Protestor’s Proposal
THE UNITED STATES,                    *               Information to Competitor; Prejudice;
                                      *               Permanent Injunction
                  Defendant.          *
***************************************

Thomas A. Coulter, Washington, DC, for plaintiff.

James W. Poirier, United States Department of Justice, Washington, DC, for defendant.

                                    OPINION AND ORDER

SWEENEY, Senior Judge

        In this preaward bid protest, plaintiff SAGAM Sécurité Senegal (“SAGAM”) challenges
the cancellation of a solicitation by the United States Department of State (“State” or “agency”).
Specifically, SAGAM alleges that State improperly disclosed portions of SAGAM’s proposal to
Torres-SAS Security LLC Joint Venture (“Torres”) and then erred when it cancelled the
solicitation. According to SAGAM, the appropriate remedy for the agency’s improper disclosure
was to disqualify Torres from the competition for the contract requirement. Before the court are
the parties’ cross-motions for judgment on the administrative record, as well as defendant’s
motion to dismiss one count of SAGAM’s complaint as moot. As explained below, the court
grants defendant’s motion for partial dismissal, grants SAGAM’s motion for judgment on the
administrative record, denies defendant’s cross-motion for judgment on the administrative
record, and enters a permanent injunction.

                                       I. BACKGROUND

                    A. The Competition Resulting in an Award to Torres

       *
           The court initially issued this Opinion and Order under seal with instructions for the
parties to propose any redactions. The parties informed the court that no redactions were
necessary to the Opinion and Order.
        For approximately thirty-five years, SAGAM has been providing local guard services to
the United States embassy in Dakar, Senegal. Compl. ¶ 5. State issued Solicitation No.
19AQMM18R0332 for the continuation of these services on April 19, 2019, and amended the
solicitation three times. Administrative R. (“AR”) 1-438. The awardee would perform contract
services for a base year, with the possibility of extending performance for four option years. Id.
at 329. Proposals were due on July 15, 2019. Id. at 412. Award would be made to the “Lowest
Price Technically Acceptable” proposal. Id. at 432.

        Three offerors submitted proposals: SAGAM, Torres, and SAKOM Services WI LLC
(“SAKOM”). Id. at 1433. None of the proposals was acceptable to State as submitted. Id. at
1434, 1437, 1439. Although the agency believed that both SAGAM and Torres could render
their proposals acceptable through discussions, SAKOM’s proposal was eliminated from the
competitive range. Id. at 1441-42. State sent round-one discussion letters to SAGAM and
Torres on August 23, 2019. Id. at 1444-51. Proposal revisions were sent to the agency on
August 30, 2019. Id. at 1452-1980. Once the revised proposals were evaluated, both SAGAM
and Torres were deemed to have submitted acceptable proposals. Id. at 2014.

        State then initiated round-two discussions with both offerors. Id. at 2016-21. It sent
discussion letters on December 3, 2019, requesting further information and a “best and final
offer” from each offeror by December 13, 2019. Id. at 2016, 2021. Of primary relevance to this
protest, State included a number of very specific items in its round-two discussion letter with
Torres that disclosed specific elements of SAGAM’s proposal. Id. at 2018-21. The round-two
discussion letter sent to Torres was markedly more detailed and comprehensive than the brief
discussion letter sent to SAGAM. Compare id. at 2016, with id. at 2018-21.

        Once State received the final, revised proposals sent by SAGAM and Torres, it chose
Torres as the awardee because of Torres’s lower price. Id. at 2345-46. The agency notified
SAGAM on March 10, 2020, that Torres had been selected for award, and disclosed Torres’s
overall price as part of its debriefing of SAGAM on March 12, 2020. Id. at 2350-53. The cost
savings to State for awarding the contract to Torres rather than to SAGAM, based on the
evaluated prices of the offerors, was approximately twenty-two percent. Id. at 2352.

                        B. The First Corrective Action Taken by State

        On March 17, 2020, SAGAM lodged a protest at the Government Accountability Office
(“GAO”) to challenge the agency’s award decision. Id. at 2354-72, 2421-2574. Of relevance
here, SAGAM alleged that Torres’s employee compensation plan was not technically acceptable
because Torres’s price was “unreasonable and unrealistic.” Id. at 2356. On April 8, 2020, State
filed a “Notice of Corrective Action,” informing the GAO that the agency would “evaluat[e] the
offerors’ compensation plans; [and] if necessary, conduct[] discussions and evaluat[e] final
proposal revisions; and, mak[e] a new award decision.” Id. at 2376. In consequence, the GAO
dismissed the protest as academic on April 14, 2020. Id. at 2378.

       There is no documentation in the record as to State’s corrective action between April 14,
2020, and November 18, 2020, when an internal memorandum was circulated by the contracting

                                                -2-
officer (“CO”) on the topic of a “possible Procurement Integrity Act violation” in this
procurement. 1 Id. at 2385. Therein, the CO acknowledged that she “took information from
SAGAM’s compensation plan to request additional clarifications regarding [Torres’s]
compensation plan.” Id. The CO also concluded that the disclosure caused an “impact on the
procurement,” a view that was shared by the contracting hierarchy at State. Id. at 2386-87. At
the conclusion of the CO’s memorandum, a box was checked to indicate that the agency’s Head
of Contracting Activity (“HCA”) concurred with her assessment that a procurement integrity
violation had an impact on the procurement, and further stated that “the contacting officer must
cancel the solicitation.” Id. at 2387.

                       C. The Second Corrective Action Taken by State

        On December 2, 2020, State emailed SAGAM a “Notice of Solicitation Cancellation.”
Id. at 2390. As part of that notice, the agency stated that the “solicitation [wa]s being cancelled
following a determination by the Department of State HCA that the Department violated the
[PIA] and that the violation impacted the procurement.” Id. The agency also announced its
intention to issue a new solicitation “in the near future.” Id. SAGAM was invited to compete,
once again, for the contract requirement. Id. Although SAGAM attempted to protest the
cancellation of the solicitation at the GAO, the GAO dismissed the protest as untimely. Id. at
2417-20. The GAO’s decision issued on March 22, 2021. Id.

                                         D. This Protest

        On March 30, 2021, SAGAM filed a protest in this court challenging the cancellation of
the solicitation by State. Although there are a number of grounds stated in SAGAM’s complaint,
the principal contention advanced by SAGAM is that State’s cancellation decision was arbitrary
and capricious. Compl. ¶¶ 11, 32-44. Defendant argues that the cancellation decision was
lawful and not arbitrary, and that SAGAM’s protest ground related to the impropriety of the
contract award to Torres, later rescinded by State, is moot. At the conclusion of briefing, the
court held oral argument on June 24, 2021. This matter is now ripe for a ruling.

                                        II. DISCUSSION

                               A. Bid Protest Standard of Review

          Defendant seeks the dismissal of Count II of the complaint on mootness grounds.
Mootness is a threshold jurisdictional issue. Myers Investigative & Sec. Servs., Inc. v. United
States, 275 F.3d 1366, 1369 (Fed. Cir. 2002). “When, during the course of litigation, it develops
that . . . the questions originally in controversy between the parties are no longer at issue, the
case should generally be dismissed.” Chapman L. Firm Co. v. Greenleaf Constr. Co., 490 F.3d
934, 939 (Fed. Cir. 2007). To the extent that a bid protest ground challenges a course of action
that the agency has already abandoned, that protest ground is moot and must be dismissed. See,
e.g., Peraton Inc. v. United States, 146 Fed. Cl. 94, 101 (2019) (dismissing as moot a challenge

       1
          The statutory provisions commonly known as the Procurement Integrity Act (“PIA”)
are codified at 41 U.S.C. §§ 2101-2107.

                                                -3-
to an initial corrective action that was superseded by a revised corrective action).

         SAGAM and defendant have also filed cross-motions for judgment on the administrative
record. In ruling on such motions, “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.” A & D Fire Prot.,
Inc. v. United States, 72 Fed. Cl. 126, 131 (2006) (citing Bannum, Inc. v. United States, 404 F.3d
1346, 1356 (Fed. Cir. 2005)). Because the court makes “factual findings . . . from the record
evidence,” judgment on the administrative record “is properly understood as intending to provide
for an expedited trial on the record.” Bannum, 404 F.3d at 1356.

        The court reviews challenged agency conduct pursuant to the standards set forth in 5
U.S.C. § 706. 28 U.S.C. § 1491(b)(4). Specifically, “the proper standard to be applied in bid
protest cases is provided by 5 U.S.C. § 706(2)(A): a reviewing court shall set aside the agency
action if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.’” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350 (Fed. Cir. 2004). Under
this standard, the court

       may set aside a procurement action if “(1) the procurement official’s decision
       lacked a rational basis; or (2) the procurement procedure involved a violation of
       regulation or procedure.” A court reviews a challenge brought on the first ground
       “to 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.” “When a
       challenge is brought on the second ground, the disappointed bidder must show a
       clear and prejudicial violation of applicable statutes or regulations.”

Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (quoting Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332-33 (Fed. Cir.
2001)); accord Savantage Fin. Servs., Inc. v. United States, 595 F.3d 1282, 1286-87 (Fed. Cir.
2010) (providing that a protestor has the “burden of showing that the agency’s decision . . . is so
plainly unjustified as to lack a rational basis”); Advanced Data Concepts, Inc. v. United States,
216 F.3d 1054, 1058 (Fed. Cir. 2000) (stating that the arbitrary and capricious standard “requires
a reviewing court to sustain an agency action evincing rational reasoning and consideration of
relevant factors”). Examples of arbitrary and capricious actions include “when the agency
‘entirely failed to consider an important aspect of the problem, offered an explanation for its
decision that runs counter to the evidence before the agency, or [the decision] is so implausible
that it could not be ascribed to a difference in view or the product of agency expertise.’” Ala.
Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009)
(quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

         Procurement officials “‘are entitled to exercise discretion upon a broad range of issues
confronting them’ in the procurement process.” Impresa, 238 F.3d at 1332 (quoting Latecoere
Int’l, Inc. v. U.S. Dep’t of the Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)). Thus, the court’s
review of a procuring agency’s decision is “highly deferential.” Advanced Data Concepts, 216
F.3d at 1058; see also Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971)
(“The court is not empowered to substitute its judgment for that of the agency.”). Furthermore,

                                                 -4-
in a challenge to a negotiated procurement, the “protestor’s burden of proving that the award was
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law is greater
than in other types of bid protests.” Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,
1330 (Fed. Cir. 2004).

        In addition to showing “a significant error in the procurement process,” a protestor must
show “that the error prejudiced it.” Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.
1996); accord Bannum, 404 F.3d at 1351 (holding that if the procuring agency’s decision lacked
a rational basis or was made in violation of the applicable statutes, regulations, or procedures, the
court must then “determine, as a factual matter, if the bid protester was prejudiced by that
conduct”). “To establish prejudice . . . , a protester must show that there was a ‘substantial
chance’ it would have received the contract award absent the alleged error.” Banknote, 365 F.3d
at 1351 (quoting Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1086 (Fed.
Cir. 2001)); see also Data Gen., 78 F.3d at 1562 (“[T]o establish prejudice, a protester must show
that, had it not been for the alleged error in the procurement process, there was a reasonable
likelihood that the protester would have been awarded the contract.”). The test for establishing
prejudice “is more lenient than showing actual causation, that is, showing that but for the errors
[the protestor] would have won the contract.” Bannum, 404 F.3d at 1358.

                                            B. Analysis

        As a threshold matter, defendant’s motion for partial dismissal of the complaint is quickly
resolved; indeed, SAGAM did not respond to defendant’s mootness argument in its response
brief. The contract award to Torres is no longer a live issue in this protest. Even if the agency
conducted improper discussions with Torres in an attempt “to steer an award to Torres,” as
alleged in Count II of the complaint, Compl. 16, the award to Torres in March 2020 has been
rescinded–rendering this protest ground moot. 2 Defendant’s motion to dismiss Count II of the
complaint is granted.

        Turning to the merits of this protest, SAGAM challenges the rationality of the second
corrective action taken by State–the cancellation of the solicitation with intent to issue a new
solicitation. In SAGAM’s view, State’s only rational course of action, once the PIA violation
was uncovered by the agency’s legal staff, was to disqualify Torres from the competition.
SAGAM also asserts that the cancellation decision violated various fairness provisions in the
Federal Acquisition Regulation (“FAR”), codified in Title 48 of the Code of Federal
Regulations. 3

       2
          SAGAM’s allegations in this regard remain relevant to the court’s review of the
rationality of the agency’s decision to cancel the solicitation.
       3
          Although SAGAM also argues that the agency breached its duty of good faith and fair
dealing in this procurement, the United States Court of Appeals for the Federal Circuit (“Federal
Circuit”) recently held that the arbitrary and capricious standard of review for bid protests
encompasses such a claim. See Safeguard Base Operations, LLC v. United States, 989 F.3d
1326, 1332 (Fed. Cir. 2021) (“[W]e . . . address a question of first impression—whether the
Claims Court has jurisdiction over a claim that the Government breached an implied-in-fact
contract to fairly and honestly consider an offeror’s proposal in the procurement context.”), 1343
                                                 -5-
        Defendant contends that SAGAM’s protest lacks merit and requests the entry of
judgment in its favor. 4 In addition, defendant argues for the first time in its reply brief that
SAGAM’s challenge to the issuance of a new solicitation is not ripe. The latter argument must
be rejected, for two reasons.

        First, the argument is untimely. SAGAM’s objection to the issuance of a new solicitation
by State, which is the necessary consequence of State cancelling the current solicitation, was
squarely raised in SAGAM’s opening brief. The time for asserting any ripeness argument in
opposition to this aspect of SAGAM’s protest was when defendant filed its cross-motion for
judgment on the administrative record. Because defendant’s ripeness argument was first raised
in a reply brief, it is waived and will not be considered by the court. See, e.g., Novosteel SA v.
United States, 284 F.3d 1261, 1274 (Fed. Cir. 2002) (treating an argument raised for the first
time in a reply brief as waived).

        Second, there is no ripeness problem here. State’s issuance of a new solicitation is part
and parcel of its cancellation of the tainted solicitation. In the letters announcing the cancellation
of the tainted solicitation, State informed both Torres and SAGAM that a new solicitation would
issue “in the near future.” AR 2390-91. This proposed agency action, cancellation combined
with the issuance of a new solicitation, is ripe and subject to protest. See, e.g., Sys. Application
& Techs., Inc. v. United States, 691 F.3d 1374, 1381 (Fed. Cir. 2012) (“This court has made
clear that bid protest jurisdiction arises when an agency decides to take corrective action even
when such action is not fully implemented.”). Even if defendant’s ripeness argument were not
waived the court would necessarily reject it.

        The principal question before the court, then, is a narrow one: Was State’s decision to
cancel the tainted solicitation and issue a new solicitation for the requirement rational in light of
the CO’s PIA violation? The court first examines the error that provoked the agency’s
cancellation decision.

           1. The CO’s Disclosure of SAGAM’s Proposal Information Was Improper

       It is undisputed that the CO erred when she shared elements of SAGAM’s proposal with

(“[W]e adopt the traditional standards of review applicable in other bid protest cases brought
under § 1491(b)(1)[, and not the standards of review applicable in cases brought under
§ 1491(a),] to bid protest[] cases which also raise implied-in-fact contract claims in the
procurement context.”). For this reason the court will not separately address SAGAM’s
arguments alleging a breach of the agency’s duty of good faith and fair dealing.
       4
           Defendant does not challenge SAGAM’s standing to bring this suit. SAGAM is an
interested party with standing to bring this protest under either of the preaward standing tests
articulated by the Federal Circuit. See Orion Tech., Inc. v. United States, 704 F.3d 1344,
1348-49 (Fed. Cir. 2013) (holding that the standing test varies depending on the type of preaward
protest at issue).

                                                 -6-
Torres so that Torres could improve its proposal. 5 See Def.’s Cross-Mot. 1 (“There is no dispute
about the fact that the contracting officer made a mistake during the course of the procurement,
and that corrective action is appropriate.”), 31 (stating that the CO’s November 2020 report
“described errors by the contracting officer during the price evaluation in the last months of
2019”), 32 (stating that the CO “supplied SAGAM’s proposal information to Torres”), 34
(noting that the CO’s November 2020 report “described a disclosure of proposal information by
the contracting officer”). State acknowledged in its communication to SAGAM that the
disclosure was a PIA violation, and the CO has since acknowledged in this litigation that her
disclosure of SAGAM’s proposal information to Torres was a PIA violation. Def.’s Suppl. Br.
Ex. 1. Nevertheless, defendant resists such a characterization and instead argues that it is
“perhaps a close question” whether the CO did, indeed, violate the PIA. Def.’s Cross-Mot. 27.

        The PIA provisions that forbid a disclosure of the type made here are found at 41 U.S.C.
§§ 2101(2), 2102(a). Simply put, according to these provisions, a procurement official may not
disclose one bidder’s competition-sensitive proposal features, as enumerated in section 2101(2),
to a competing bidder in an ongoing procurement. See, e.g., FAR 3.104-3 (stating that a
contracting officer “must not, other than as provided by law, knowingly disclose contractor bid
or proposal information or source selection information before the award of a Federal agency
procurement contract to which the information relates”); Lion Vallen, Inc., B-418503 et al., 2020
WL 3542208 (Comp. Gen. May 29, 2020) (“The disclosure of proprietary or source selection
information to an unauthorized person during the course of a procurement is improper.”).
Defendant nonetheless suggests that SAGAM’s proposal information, disclosed by the CO to
Torres, does not meet the definition of “proposal information” protected by the PIA. The court
disagrees.

        The information in SAGAM’s proposal that was passed by the CO to Torres related to
the exigencies of complying with local labor laws and labor agreements in Senegal and set forth
SAGAM’s understanding of those local conditions. This understanding was essential to
SAGAM’s plan for the compensation and benefits that would be provided to its guard force. To
imply, as defendant does here, that SAGAM’s compilation of pertinent local information had no
protection under the PIA because the laws and agreements cited by SAGAM were publicly
available is unsupportable.

        Defendant acknowledges that the disclosed information regarding local conditions was
lifted directly from “footnotes to [a] detailed chart” in SAGAM’s proposal. Def.’s Cross-Mot.
26-27 (comparing pages 1467-70 and 2018-19 of the administrative record). The chart included
citations to provisions of laws and labor agreements to explain specific cost categories in
SAGAM’s proposal, so as to provide State with the rationale for the costs of contract
performance proposed by SAGAM. See id. at 26 (characterizing the information taken from
SAGAM’s proposal as “cost categories based upon Senegalese statutes and public labor
agreements”). The information conveyed by the CO to Torres was not simply a general
reference to publicly available laws and labor agreements–each of SAGAM’s citations to these

       5
          Her intent in sharing information gleaned from SAGAM’s proposal with Torres is not
relevant to the instant protest, but the error was egregious.

                                               -7-
laws and agreements was linked to specific aspects of contract performance and contract costs. 6

        The information disclosed to Torres by the CO is encompassed within the definition of
“Cost or pricing data” that is prohibited from disclosure under the PIA. 7 41 U.S.C.
§ 2101(2)(A); see also id. § 3501(a)(1) (“The term ‘cost or pricing data’ means all facts that, as
of the date of agreement on the price of a contract . . . , a prudent buyer or seller would
reasonably expect to affect price negotiations significantly.”). Because the information passed
by the CO to Torres was cost data protected by the PIA, id. § 2101(2)(A), the court need not
decide whether this information might also be protected as “proprietary information” under the
PIA, id. § 2101(2)(C). The CO in this procurement clearly violated the PIA through her
improper disclosure of SAGAM’s proposal information to Torres.

        Furthermore, it is not just the PIA that was violated by the CO. SAGAM points to three
fundamental fairness provisions of the FAR that also safeguard the integrity of federal
procurement activities–FAR 1.102-2, FAR 1.602-2, and FAR 3.101-1. 8 FAR 1.102-2(c)(3)
states that “[a]ll contractors and prospective contractors shall be treated fairly and impartially but
need not be treated the same.” FAR 1.602-2(b) states that contracting officers shall “[e]nsure
that contractors receive impartial, fair, and equitable treatment.” FAR 3.101-1 states that
“[g]overnment business shall be conducted in a manner above reproach and, except as authorized
by statute or regulation, with complete impartiality and with preferential treatment for none.”
Pursuant to any and all of these measures, a CO may not disclose the cost data of one offeror to
the offeror’s sole competitor in a procurement so that the competitor may appropriate the
information. Cf. MORI Assocs., Inc. v. United States, 102 Fed. Cl. 503, 511-13, 523-25 (2011)
(noting that the fairness provisions of the FAR are implicated where there is evidence that an
agency official violated the PIA to favor a particular offeror); Comput. Tech. Assocs., Inc.,
B-288622, 2001 CPD ¶ 187 (Comp. Gen. Nov. 7, 2001) (noting, in the context of a PIA
violation, that FAR 1.602-2 authorizes a contracting officer to “protect the integrity of the
procurement system by disqualifying an offeror from the competition”); Litton Sys., Inc., 68

       6
          Defendant does not allege that SAGAM’s explanatory footnotes linking local labor
laws and labor agreements to the cost categories in its proposal had “been previously made
available to the public or disclosed publicly,” FAR 3.104-1, so as to remove this information
from the protection of the PIA.
       7
          As defendant’s counsel noted at oral argument, the parties did not reference cost data, a
category of proposal information protected by the PIA, 41 U.S.C. § 2101(2)(A), in their briefs.
Although the disclosure of publicly available cost or price information causes no competitive
harm, see Liquidity Servs., Inc., B-409718, 2014 CPD ¶ 221 (Comp. Gen. July 23, 2014)
(finding no competitive harm where a rival offeror may have had access to the protestor’s prices
on a prior contract), SAGAM’s application of relevant provisions of law and labor agreements to
its guard compensation cost categories was competition-sensitive information, cf. Lion Vallen,
Inc., 2020 WL 3542208, at *7 (noting that the agency acknowledged that the disclosure of the
protestor’s overall price to another offeror “affected the competition”).
       8
          These regulations are referenced by SAGAM in its critique of the agency’s cancellation
decision, not in the context of the CO’s improper disclosures to Torres.

                                                 -8-
Comp. Gen. 422, 425 (May 12, 1989) (recommending that “the integrity of the [procurement]
system would be best served by a termination of the [awardee’s] contract” because of evidence
that an agency official had passed to the awardee nonpublic information regarding technology
developed by its only competitor). The court finds that the CO also violated FAR 1.102-2, FAR
1.602-2, and FAR 3.101-1, not just the PIA, when she disclosed SAGAM’s proposal information
to Torres.

        The court next reviews the agency’s proposed corrective action of cancelling the tainted
solicitation and issuing a new solicitation.

   2. Torres Must Be Disqualified to Rationally Address the CO’s Improper Disclosure

        State acknowledged in late 2020 that the PIA had been violated and that the procurement
had been impacted. According to defendant, at that point the agency had discretion to cancel the
solicitation and SAGAM’s protest is “mere disagreement with the scope of the agency’s
corrective action.” Def.’s Cross-Mot. 32. The fundamental flaw with defendant’s position is
that cancellation does nothing to remedy the improper disclosure to Torres–cancellation of the
solicitation followed by the issuance of a new solicitation, as is contemplated here, merely
perpetuates the agency’s procurement error so that Torres can continue to benefit from the CO’s
unfairness to SAGAM and her violation of the PIA.

        The nature of this court’s review of challenges to an agency’s corrective action was
examined in Dell Federal Systems, L.P. v. United States (“Dell Federal”), 906 F.3d 982 (Fed.
Cir. 2018). As is relevant here, the “‘court may set aside a procurement action,’ such as a
corrective action, ‘if . . . the procurement official’s decision lacked a rational basis.’” Id. at 990
(quoting Centech Grp., 554 F.3d at 1037). The Federal Circuit also stated that “corrective action
only requires a rational basis for its implementation.” Id. at 991. In other words, the rational
basis review for agency corrective actions is “highly deferential,” id. at 992 (quoting Croman
Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir. 2013)), and is satisfied if the agency
“provided a coherent and reasonable explanation of its exercise of discretion,” id. (quoting
Banknote, 365 F.3d at 1351). Applying this standard, the court considers the parties’ arguments
as to the rationality of State’s cancellation decision.

        As a threshold matter, SAGAM argues that the administrative record of this case does not
contain an adequate explanation of the rationale behind State’s decision to cancel the solicitation
and not to disqualify Torres. See Pl.’s Mem. 27 (“Without any supporting rationale for choosing
cancellation as the most appropriate remedy for its PIA violation, the Court is left without any
basis against which to judge the rationality of that decision, in light of the other options available
to the Agency.” (emphasis added) (citing Starry Assocs., Inc. v. United States, 127 Fed. Cl. 539,
550 (2016))). The burden on State to explain its cancellation decision is not as onerous as
SAGAM suggests, however.

        Defendant argues that State “has no obligation to explain why it did not take some other
corrective action that a protester believes would have been a better corrective action.” Def.’s
Cross-Mot. 33 (citing Dell Federal, 906 F.3d at 991-93). The Supreme Court of the United
States, in defining the arbitrary and capricious standard of review of agency action, stated that a

                                                 -9-
court will “uphold a decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286
(1974). More specifically, in Dell Federal, the Federal Circuit held that the procuring agency
“was not legally required to address every [corrective action] option, but rather to provide a
reasonable corrective action and adequately explain its reasoning for doing so.” 906 F.3d at 998.
Here, then, the burden on State is to provide a record of the rationale for the cancellation
decision, so that the court may determine if this record provides “a coherent and reasonable
explanation of [State’s] exercise of discretion.” Banknote, 365 F.3d at 1351.

        The administrative record reflects that the HCA received a detailed account of the PIA
violation that marred this procurement. It is clear that the CO believed that she could not
“mitigate the PIA violation” and also believed that the proper corrective action was to “cancel
and re-solicit the requirement.” AR 2891. The HCA agreed with her assessment and her
proposed course of action. As State reported to the GAO, the HCA determined that “the
solicitation should be cancelled and the requirement re-solicited at a later date.” Id. at 2407. The
record before the court is adequate to decide whether the agency’s corrective action survives
rational basis review.

        As the court undertakes its review of the record it is important to note that the facts here
are unusual–the CO and State acknowledged that a PIA violation occurred but failed to take
steps which would restore fairness to this procurement. The court understands that most
contracting officers safeguard the proposal information sent to them by offerors and work
diligently to prevent, rather than to initiate, inappropriate disclosures of this information. In
addition, the court recognizes that most procuring agencies take steps to remedy a PIA violation,
once the facts of the violation come to light, instead of ignoring the harm the PIA violation
caused. Given that the agency in this procurement is so out of step with the norm, analogous bid
protests are few. Before turning to precedent, the court considers the parties’ perspectives on the
effect that cancellation and resolicitation would have on SAGAM, Torres, and the agency, and
whether in light of those effects the cancellation decision was rational.

        Defendant musters very little logical support for State’s decision to cancel the
solicitation, other than to note that the FAR authorizes that type of corrective action, among
others, after a PIA violation has occurred. See Def.’s Cross-Mot. 28 (“One remedy available to
the HCA is to cancel the procurement.” (citing FAR 3.104-7(d)(1)(i))). Indeed, defendant’s
cross-motion for judgment on the administrative record is devoid of any substantive argument as
to the reasonableness of the corrective action chosen by State. Instead, defendant relies on the
CO’s PIA violation report to imply that it was not reasonable to allow the award to Torres to
stand, see id. at 32 (noting “the uncertainty about the propriety of the award to Torres”), and to
imply that it was not reasonable to proceed with the reevaluation of proposals, as State had
planned for its first corrective action, because the PIA violation had an impact on the
competition, id. at 27 (“In this case, the contracting officer’s determination that a potential [PIA]
violation did have an impact upon the procurement was not arbitrary.” (citing AR 2385-86)).
Defendant’s reliance on the CO’s report does not address whether the cancellation decision,
under these circumstances, was a “reasonable corrective action,” as required by Dell Federal, 906
F.3d at 998, and does not address the effect of the cancellation on the fairness of any competition
under a new solicitation.

                                                -10-
       The only fairness concern raised in defendant’s motion is that of the fairness of the
disqualification of Torres proposed by SAGAM. This passage is indicative of defendant’s
concern:

              The [CO’s] report did not suggest that Torres did anything wrong, or even
       that Torres knew that the discussion letter contained SAGAM[’s] proposal
       information. The December discussion letter from the contracting officer to
       Torres did not tell Torres that the checklist of cost categories had been gathered
       from the SAGAM proposal.

Def.’s Cross-Mot. 32 (citing AR 2018-21, 2385-86). In addition, the fact that Torres benefited
from a PIA violation, but did not plot to obtain SAGAM’s proposal information, is emphasized
in another passage of defendant’s motion:

       [T]he information provided to the HCA in this case made clear that Torres had not
       committed any violation of the PIA, or otherwise behaved improperly. The
       [CO’s] report described a disclosure of proposal information by the contracting
       officer; Torres played no role is seeking the disclosure. The only action taken by
       Torres in connection with the disclosure letter was to respond to questions posed
       by the contracting officer. Responding to the contracting officer’s questions was
       proper behavior.

Id. at 34 (citing AR 2385-86); see also Def.’s Reply 6 (asserting that “Torres had done nothing
wrong”). Nowhere, however, does defendant address the fairness of the cancellation from the
standpoint of SAGAM, the victim of the CO’s PIA violation. In this regard, the CO’s disregard
of the fundamental fairness principles of the FAR is echoed in defendant’s motion.

        In its reply brief, in passing, defendant notes SAGAM’s argument that SAGAM “will
suffer a competitive harm in a subsequent procurement if Torres is allowed to offer a new
proposal with labor rates and fringe benefit rates that comply with Seneg[a]lese law.” Def.’s
Reply 6-7. That passing mention of the competitive harm alleged by SAGAM is not given any
weight in defendant’s legal analysis. Instead, defendant minimizes fairness concerns by
asserting that “SAGAM wildly exaggerates the significance of the proposal information
disclosed in the previous (now cancelled) procurement.” Id. at 14.

        Finally, defendant rests on the assertion that “we have demonstrated in our moving brief
that the State Department articulated a rational basis for its corrective action.” Id. at 11 (citing
Def.’s Cross-Mot. 26-33). But, as noted above, beyond the fact that cancellation is permitted by
FAR 3.104-7(d)(1)(i), the referenced sections of defendant’s motion do not show that the
cancellation decision was reasonable–they merely show that the CO proposed cancellation
because the PIA violation could not, in her opinion, be mitigated.

        It may be that defendant’s misapprehension of the persuasiveness of its rational basis
contentions is founded on a skewed interpretation of Dell Federal. As part of defendant’s
critique of SAGAM’s interpretation of the standard of review stated in Dell Federal, defendant

                                                -11-
chides SAGAM for including a requirement that the court go “beyond determining whether there
is a rational relationship between a defect in the procurement and the corrective action.” Def.’s
Reply 9. Although the Federal Circuit in Dell Federal endorsed the agency’s corrective action
and noted that it was “rationally related” to the procurement’s defects, 906 F.3d at 995, this turn
of phrase does not fully capture the essence of the Federal Circuit’s rational basis review of the
procurement at issue.

        In Dell Federal, two procurement errors were addressed by the agency’s corrective
action: “failure to conduct discussions and spreadsheet ambiguities.” Id. The agency’s
corrective action survived rational basis review because both defects were remedied. First, the
Federal Circuit noted that “the only way to conduct discussions as contemplated here is to reopen
the procurement process to solicit revised proposals,” id., which is exactly what the agency
proposed to do with its corrective action, id. at 988. Second, the spreadsheet ambiguities were
“material” and could not be corrected through clarifications, so the ambiguities would be
addressed in discussions the agency would hold with the offerors. Id. at 995. Thus, because the
agency’s corrective action was “rationally related” to the defects it addressed, it was reasonable
and survived rational basis review. Id.

         If defendant were correct that any rational relationship, no matter how tenuous, between a
procurement defect and the agency’s corrective action suffices, the requirement that the agency
initiate a “reasonable corrective action,” Dell Federal, 906 F.3d at 998, is cast aside. Under
defendant’s rational relationship construct, it appears that the CO could cancel the solicitation
merely because (a) she committed a PIA violation, and (b) there is a rational relationship in the
FAR between PIA violations and solicitation cancellations. But that is not the standard that the
Federal Circuit set forth in Dell Federal, as shown by its application of the standard to the facts
of that bid protest, and by its invocation of precedent.

        The Federal Circuit requires, under the rational basis standard, that an agency’s corrective
action be “rationally based and not contrary to law.” Croman Corp., 724 F.3d at 1367; see also
Raytheon Co. v. United States, 809 F.3d 590, 595 (Fed. Cir. 2015) (inquiring whether the
grounds for the challenged corrective action were “rationally justified”); Chapman L. Firm Co.,
490 F.3d at 938 (affirming “this court’s inquiry into the reasonableness of the Government’s . . .
proposed corrective action”). As this precedent was interpreted in Dell Federal, the corrective
action must have a rational basis, or, in other words, it must be a “reasonable corrective action.”
906 F.3d at 998. This is a very deferential standard, but it is nonetheless more stringent than the
carte blanche for State that defendant appears to propose.

        In contrast to defendant, SAGAM thoroughly examines the effect of the cancellation and
new solicitation, as well as the rationality of State’s corrective action. SAGAM asserts that the
CO’s PIA violation “allowed Torres to correct its defective compensation plan,” and cancellation
of the solicitation “does nothing to reasonably address the fact that Torres will simply prepare a
new bid proposal” using the information taken from SAGAM’s proposal that was improperly
disclosed to Torres by the CO. Pl.’s Mem. 28, 30. In SAGAM’s view, any reasonable corrective
action must remove the “taint” of the PIA violation from State’s procurement of the contract
requirement. Id. at 30 (citing NKF Eng’g, Inc. v. United States, 805 F.2d 372, 376-77 (Fed. Cir.
1986)). Although defendant may quibble with SAGAM’s characterization of the nature and

                                               -12-
importance of the improperly disclosed cost and pricing data, the court agrees with SAGAM that
the integrity of this procurement was tainted, and that any reasonable corrective action was
required to address, in some substantive way, the fact that Torres now possesses competition-
sensitive information that it has no right to possess. See id. at 2-3 (“[T]he only effective way to
remove the taint . . . is to disqualify Torres and proceed to award under the current Solicitation or
to disqualify Torres from participating in the planned resolicitation . . . .”).

         As for the parties’ dispute over the proper standard of review, SAGAM correctly notes
that it is arbitrary and capricious for an agency to have “entirely failed to consider an important
aspect of the problem,” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43; the important aspects of the
problem in this case are that State tainted the integrity of this procurement and that Torres
possesses information that gives it an unfair advantage. This is not a protest foreclosed by Dell
Federal, as defendant insists, in which a protestor challenges a corrective action for not being the
most advantageous choice of a remedy for a procurement defect. Here, SAGAM rightly attacks
the cancellation decision as ignoring the most significant aspect of the CO’s PIA violation–that
Torres now possesses improperly disclosed information that it can use again, unfairly, to obtain
the contract award. The court therefore agrees with SAGAM that the cancellation decision lacks
a rational basis, as does State’s plan to resolicit the requirement. 9

        Other bid protest decisions supply guidance in this case, starting with binding precedent
that provides an overview of the tools that might be used to ensure procurement integrity. It is
clear that a contracting officer has broad authority to protect the integrity of the procurement
process, including the authority to disqualify an offeror based on an impropriety or an
appearance of impropriety in the procurement. NKF Eng’g, 805 F.2d at 377 & n.7. This
authority to disqualify offerors is explicitly authorized, in the context of PIA violations, by FAR
3.104-7(d)(1)(ii). The contracting officer’s power to disqualify offerors so as to cure an
appearance of impropriety must yield, however, to statutory mandates requiring the public
release of information held by government agencies. R & W Flammann GmbH v. United States,
339 F.3d 1320, 1324 (Fed. Cir. 2003). Finally, in the procurement integrity context, a
contracting officer may not disqualify an offeror in the absence of facts showing that an
impropriety or an appearance of impropriety occurred. See NKF Eng’g, 805 F.2d at 376
(interpreting the holding of CACI, Inc.-Fed. v. United States, 719 F.2d 1567 (Fed. Cir. 1983)).

         The parties unearthed a body of nonbinding precedent that touches upon the issue of the
reasonableness of corrective actions that address procurement improprieties. These decisions are
largely unhelpful due to the unusual facts of this case. It is ironic that defendant chides SAGAM
for failing to find analogous cases, when it was the CO’s behavior in this procurement that
stepped so far out of the normal course of a procuring agency’s communications with offerors.
See Def.’s Cross-Mot. 34 (“In its brief, SAGAM cites no case holding that an offeror should be
disqualified based upon a PIA violation, or other misconduct, committed by someone else.”), 36
(asserting that SAGAM’s proposal that State disqualify Torres is made “without citing any legal
authority”); Def.’s Reply 12 (“SAGAM fails to cite a single decision where an offeror was
disqualified merely because that offeror possessed proposal information from a prior

       9
           Torres was invited by State to compete for the contract requirement under the new
solicitation. AR 2391.

                                                -13-
procurement.”). Notwithstanding the paucity of bid protests that resemble this one, persuasive
authority and common sense compel the conclusion that State’s cancellation decision was not a
rationally related response to the procurement defect that left Torres in possession of SAGAM’s
competition-sensitive information.

        The court begins with Lion Vallen, Inc., a recent decision issued by the GAO. 2020 WL
3542208. According to the agency’s contracting officer, an inadvertent disclosure of one
offeror’s “price and other source selection information” to another offeror, during discussions,
“incurably affect[ed] the source selection process,” so the contracting officer “recommended
cancelling the procurement.” Id. at *3. After the cancellation, the agency issued a new
solicitation. Id. at *4. The offeror that had been notified of the disclosure of its proposal
information protested the agency’s new solicitation, arguing, in relevant part, that “the agency
improperly disclosed the protester’s proprietary information on three occasions and failed to
adequately mitigate the competitive disadvantage from the disclosures.” Id. at *5.

         The GAO found that there was no competitive disadvantage flowing from the disclosure
of the protestor’s technical information, and that the agency had sufficiently mitigated the impact
on the procurement of the disclosure of protestor’s price information. As to the first type of
disclosure, the protestor failed to show how the technical information, which identified flaws in
the protestor’s proposed approach to contract performance, would provide a competitive
advantage to its rivals in the new competition. For the second type of information, the disclosure
of the protestor’s overall price for the cancelled solicitation was benign due to substantive
changes in the contract requirements and labor categories set forth in the new solicitation.

        Although the agency’s corrective action, including the issuance of a new solicitation, was
deemed to be reasonable in Lion Vallen, Inc., the facts here are distinguishable. SAGAM has
shown that it has and will continue to suffer a competitive disadvantage because Torres now
benefits from improperly disclosed proposal information. Cancellation and resolicitation do not
reasonably address the CO’s inequitable conduct here.

        An instructive example of the disqualification of an offeror is found in Computer
Technology Associates, a 2001 decision by the GAO. 2001 CPD ¶ 187. Employees of the
protestor improperly obtained and studied information presented orally by other offerors to
agency staff, and the protestor was disqualified from the competition. The GAO upheld the
disqualification, noting that the protestor “obtain[ed] and possess[ed] the information, and . . .
was in control of whether it was used, [which] calls into question the integrity of the immediate
and future source selections.” Id. The primary similarity between Computer Technology
Associates and this case is that Torres continues to possess the improperly disclosed information
taken from SAGAM’s proposal, which affects the integrity of the current competition as well as
a future competition. The primary difference, and it is a significant one, between Computer
Technology Associates and this case is that Torres did not steal the competition-sensitive
information–it was given the information by the CO. 10 But see Compliance Corp. v. United

       10
           Although this type of PIA violation appears to be rare, the knowing disclosure of
proposal information submitted by one offeror to persons not permitted to view such material has
been the topic of other protests. See, e.g., Litton Sys., Inc., 68 Comp. Gen. at 422 (sustaining a
                                               -14-
States, 22 Cl. Ct. 193, 201 (1990) (“Even assuming the conduct itself was devoid of improper
motives, what remains is the appearance of impropriety, which is a proper basis for
disqualification.” (citing NKF Eng’g, 805 F.2d at 376-77)), aff’d, 960 F.2d 157 (Fed. Cir. 1992).

        A logical corrective action protest to discuss here is the one the GAO flagged as raising
issues similar to those in SAGAM’s GAO protest of State’s cancellation decision, Superlative
Technologies, Inc. (“Superlative II”), B-310489.4, 2008 CPD ¶ 123 (Comp. Gen. June 3, 2008).
That decision was preceded by an earlier one, Superlative Technologies, Inc. (“Superlative I”),
B-310489 et al., 2008 CPD ¶ 12 (Comp. Gen. Jan. 4, 2008), which provides useful context. As
described in Superlative I, Superlative Technologies, Inc. (“SuperTec”) was one of three offerors
in a negotiated procurement. An agency representative reported to the contracting hierarchy that
she had compromised the integrity of the procurement by sharing confidential source-selection
information with two of the offerors, but not with SuperTec. Superlative I, 2008 CPD ¶ 12. The
contracting officer cancelled the “tainted procurement.” Id.

        Unfortunately, the new solicitation, through various improper machinations, resulted in a
sole-source contract award to a team including one of the offerors that had received the
improperly disclosed information, and the proposal that the team submitted for the sole-source
award was substantially the same as the earlier one submitted by the offeror with an “unfair
advantage” in the first competition. Id. In other words, SuperTec lost its opportunity to fairly
compete for the contract because the cancellation decision perpetuated the tainted procurement
through a new solicitation that remained fundamentally unfair. The GAO advised the agency to
“rescind the cancellation notice” and “determin[e] what information was disclosed and to whom,
[and whether one of the recipients of the improper disclosure] or any other offeror should be
disqualified from the competition, and/or whether a level playing field can be established by
disclosing the information [that was not disclosed to SuperTec] to all offerors.” Id. Finally, the
GAO recommended that “[f]ollowing that consideration, the agency should conduct a
competitive procurement for the requirements under the original [request for quotations], if
otherwise appropriate.” Id.

        In Superlative II, 2008 CPD ¶ 123, the GAO assessed, in a new but related protest,
whether the agency had followed through on its investigation of the tainted procurement and had
reasonably resolved the procurement integrity violation. It had not. Indeed, there was no
substantive investigation or consideration of procurement integrity; only when the GAO insisted
on further investigation was the importance and extent of the improper communications
revealed. Id. When the GAO warned the agency that SuperTec’s new protest would also be
sustained, in all likelihood, the agency refused to take action: “Notwithstanding our specific
advice, the agency ha[d] not indicated that it intends to take any further action with regard to
these issues.” Id.

protest because evidence indicated “that, at a critical period in the competition, source selection
sensitive information concerning Litton’s product was improperly disclosed by the Air Force to”
Litton’s sole competitor).

                                               -15-
        After a lengthy analysis of a procuring agency’s responsibilities under the fairness
provisions of the FAR, the GAO stated that the agency’s conduct “precludes a conclusion that
the cancellation, followed by the subsequent sole-source award under which [the recipient of the
improper information] is performing a substantial portion of the services sought under the
canceled solicitation, was reasonable and appropriate.” Id. The GAO commented that the
agency “fail[ed] to meaningfully address the FAR requirements regarding identification and
resolution of procurement integrity and/or [organizational conflict of interest] issues. On this
record, the agency’s actions are not reasonable, nor are they consistent with the FAR
requirements.” Id. SuperTec’s second protest was sustained, and the GAO again recommended
that the agency investigate the procurement integrity violations and determine whether, among
other options, disqualification of an offeror, or offerors, was appropriate.

        Although the court agrees with defendant that Superlative II is distinguishable from this
case on its facts, the operative issues are not dissimilar because in that procurement the agency,
after giving an unfair advantage to two of three offerors, perpetuated the unfairness through
cancellation of a solicitation and resolicitation. The agency turned a blind eye to the fairness
principles that require that all offerors be treated equitably. Here, too, State takes an ostrich-like
stance and refuses to reasonably address the taint caused by the CO’s disclosures to Torres and
the failure of cancellation and resolicitation to mitigate the CO’s improper disclosures.

        Disqualification is a tool that can level the competitive playing field. See, e.g., Guardian
Techs. Int’l, B-270213 et al., 96-1 CPD ¶ 104 (Comp. Gen. Feb. 20, 1996) (“A contracting
officer may protect the integrity of the procurement system by disqualifying an offeror from the
competition where the firm may have obtained an unfair competitive advantage, even if no actual
impropriety can be shown, so long as the determination is based on facts and not mere innuendo
or suspicion.”). And, although disqualification may seem like a severe sanction, at times it is the
only remedy that can reasonably address a PIA violation. See id. (stating that because “the
evidence is sufficient to establish a strong likelihood that [an offeror] gained an unfair
competitive advantage in this procurement,” the agency should “disqualify [the offeror with the
unfair advantage] from the competition” (citing NKF Eng’g, 805 F.2d at 372)). Here, too, the
only reasonable corrective action is to disqualify Torres from the current competition.

                             3. SAGAM Has Established Prejudice

        Although SAGAM has established that State’s cancellation and resolicitation decision
lacked a rational basis, SAGAM cannot prevail unless it demonstrates that it was prejudiced by
that corrective action. 11 Specifically, the burden on SAGAM is to show that absent the agency’s
decision, SAGAM had a substantial chance of receiving the contract award. Banknote, 365 F.3d
at 1351; Data Gen., 78 F.3d at 1562. If, rather than cancelling the solicitation, the agency had
crafted a rational corrective action and disqualified Torres from the competition under the tainted
solicitation, SAGAM had a substantial chance of receiving the contract award because it was the
only bidder, other than Torres, in the competitive range. SAGAM was prejudiced by the
corrective action instituted by State that lacked a rational basis.

       11
         Defendant did not address the issue of prejudice in either its cross-motion for
judgment on the administrative record or its reply brief.

                                                 -16-
                                 4. Injunctive Relief Is Merited

         Because SAGAM has established the existence of a significant, prejudicial procurement
error, the court must address whether SAGAM is entitled to injunctive relief. The United States
Court of Federal Claims has the authority to award injunctive relief pursuant to 28 U.S.C.
§ 1491(b)(2), and is guided in making such an award by Rule 65 of the Rules of the United
States Court of Federal Claims (“RCFC”). In determining whether to issue a permanent
injunction, the court must consider whether (1) the plaintiff has succeeded on the merits; (2) the
plaintiff will suffer irreparable harm if the court withholds injunctive relief; (3) the balance of
hardships favors the grant of injunctive relief; and (4) it is in the public interest to grant
injunctive relief. PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004).

        The protestor bears the burden of establishing the factors by a preponderance of the
evidence. Lab. Corp. of Am. Holdings v. United States, 116 Fed. Cl. 643, 654 (2014). None of
the four factors, taken individually, is dispositive, and a “weakness of the showing regarding one
factor may be overborne by the strength of the others.” FMC Corp. v. United States, 3 F.3d 424,
427 (Fed. Cir. 1993). 12 Conversely, “the absence of an adequate showing with regard to any one
factor may be sufficient, given the weight or lack of it assigned the other factors, to justify the
denial” of injunctive relief. Id. The award of injunctive relief is within the discretion of the
court. See Turner Constr. Co. v. United States, 645 F.3d 1377, 1388 (Fed. Cir. 2011) (“We give
deference to the Court of Federal Claims’ decision to grant or deny injunctive relief, only
disturbing its decision if it abused its discretion.”).

        SAGAM has succeeded on the merits of its protest. Therefore, the court considers the
three remaining injunctive relief factors.

                                      a. Irreparable Injury

         With respect to the irreparable injury factor, “[t]he relevant inquiry . . . is whether [the]
plaintiff has an adequate remedy in the absence of an injunction.” Magellan Corp. v. United
States, 27 Fed. Cl. 446, 447 (1993); see also Younger v. Harris, 401 U.S. 37, 43-44 (1971)
(noting that “the basic doctrine of equity jurisprudence [is] that courts of equity should not act
. . . when the moving party has an adequate remedy at law and will not suffer irreparable injury if
denied equitable relief”). SAGAM contends that it will be harmed absent a permanent injunction
because it will lose the ability to fairly compete for the contract, either through the tainted
solicitation or a new solicitation. SAGAM also states that resolicitation “would not only deprive
SAGAM of a contract opportunity to continue providing local guard services as it has done
successfully for more than 35 years, but also penalize SAGAM for the Agency’s PIA violation.”
Pl.’s Reply 20.

       12
           Although FMC Corp. concerns the award of a preliminary injunction, 3 F.3d at 427,
“[t]he standard for a preliminary injunction is essentially the same as for a permanent injunction
with the exception that the plaintiff must show a likelihood of success on the merits rather than
actual success,” Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531, 546 n.12 (1987).

                                                -17-
         Defendant argues that monetary losses flowing from the inability to secure a contract and
being subjected to unfair competitive bidding processes are not enough to show irreparable harm.
Further, in defendant’s view, because the record does not show that SAGAM’s proprietary
information was disclosed to Torres, SAGAM has not suffered irreparable harm. While any of
these propositions might be debatable when viewed in isolation and in hypothetical
circumstances, here there is no doubt that SAGAM has suffered irreparable harm due to the CO’s
improper disclosure of SAGAM’s proposal information to its sole rival in the competitive range
for this competition, and its likely rival in any subsequent competition. 13

        This court has recognized that a lost opportunity to compete for a contract–and the
attendant inability to obtain the profits expected from the contract–can constitute irreparable
injury. See, e.g., Serco Inc. v. United States, 81 Fed. Cl. 463, 501-02 (2008) (observing that
when “the only other available relief–the potential for recovery of bid preparation costs–would
not compensate [the protestors] for the loss of valuable business,” such a “loss, deriving from a
lost opportunity to compete on a level playing field for a contract, has been found sufficient to
prove irreparable harm”). As the long-term incumbent contractor, SAGAM submitted a proposal
with the expectation of making a profit. The lost opportunity to fairly compete for this contract
and earn profits, as evidenced by the declaration attached to SAGAM’s supplemental brief,
constitutes irreparable harm in this instance. 14

        Defendant contends, nonetheless, that because the terms of State’s new solicitation are
not yet known, SAGAM’s allegations of irreparable harm are too speculative. To support this
argument, defendant explores hypothetical scenarios: (1) “[I]t is possible that the new
solicitation will identify all statutory labor benefit provisions in Senegal, or require all offerors to
do so in their proposals, [so as to] put all offerors on an equal footing in a clear manner.”
(2) “[T]he new solicitation may contain objectionable terms, and SAGAM may protest the
solicitation.” Def.’s Suppl. Br. 5 n.2. The court does not find that these abstract scenarios
diminish the irreparable harm flowing to SAGAM from the cancellation and resolicitation of the
contract requirement. The agency’s PIA violation, unmitigated by a rational corrective action,
deprived SAGAM of a fair competition and the potential for profits from winning the contract,
and will continue to affect SAGAM’s ability to fairly compete for a new contract. Consequently,
SAGAM has established irreparable injury.

                                      b. Balance of Hardships

      In addition to considering whether a protestor would suffer an irreparable injury absent a
permanent injunction, “the court must weigh the irreparable harm [the] plaintiff would suffer

        13
           Defendant’s reliance on Citizant, Inc. v. United States, No. 18-856, 2021 WL 2371709
(Fed. Cl. June 9, 2021), is inapt. In that opinion, there was no weighing of the irreparable harm
factor to determine whether a permanent injunction should issue.
        14
            The court ordered supplemental briefing because the parties’ discussion of the
irreparable harm and balance of hardships factors was not robust, and their positions on the
feasibility of various specific proposals for injunctive relief were unclear. The supplemental
briefing caused no delay.

                                                 -18-
without an injunction against the harm an injunction would inflict on defendant.” Progressive
Indus., Inc. v. United States, 129 Fed. Cl. 457, 485 (2016). SAGAM contends that State will not
be harmed because “SAGAM is the longtime incumbent and capable of continuing to perform
under a new contract award, saving the Government from any time/cost associated with a
recompete,” Pl.’s Mem. 38, and notes that State has already deemed “SAGAM’s proposal [to be]
‘Acceptable,’” Pl.’s Reply 20. Defendant asserts in its cross-motion for judgment on the
administrative record that enjoining the cancellation of the solicitation and resolicitation of the
contract requirement would “deny the United States the benefits of competition.” Def.’s Cross-
Mot. 40.

        SAGAM argues that the balance of hardships tips in its favor. The court agrees. As
shown by the parties’ arguments in their supplemental briefs, which are supported by
declarations, the harm to SAGAM flowing from the absence of an injunction greatly outweighs
the inconvenience that State would experience from an injunction that was necessitated by the
CO’s unmitigated PIA violation. Indeed, to deny the injunction would reward the CO for her
violation.

         SAGAM highlights three specific consequences of the PIA violation, which was followed
by cancellation and a proposed resolicitation of the requirement by State: (1) Torres now
possesses SAGAM’s understanding of compensation requirements for guards in Senegal;
(2) SAGAM lost the opportunity to fairly compete for up to five years of contract performance;
and (3) SAGAM lost the opportunity to earn profits on that contract performance. According to
SAGAM, absent injunctive relief, such as the disqualification of Torres, these harms are
ongoing. Further, contends SAGAM, bid preparation and proposal costs would not make up for
its losses, because only injunctive relief provides an adequate remedy.

        Defendant recites a litany of hardships that the agency would face if this court issues an
injunction. In the agency’s view, the following conditions, among others, should be considered
by the court: (1) resolicitation is urgently needed, given the passage of time, because the
conditions in Senegal are not the same as those underlying the tainted solicitation; (2) the
disqualification of Torres would be expensive for State, as SAGAM could “name its price,”
Def.’s Suppl. Br. 10; and (3) injunctive relief could lead to more protests, including one by
Torres, potentially requiring that the agency resort to expensive sole-source contract solutions in
2022. The court is mindful, too, that the safety of embassy personnel is of grave concern, and
that national security, in general, is given “due regard” in this court’s bid protest jurisdiction.
See 28 U.S.C. § 1491(b)(3).

        It is important to note, first, that State is responsible for the hardships it now faces,
through its violation of the PIA and its failure to undertake a rational corrective action to redress
that violation. The court cannot ignore the fact that State’s hardships are largely self-inflicted
whereas SAGAM’s hardships are the product of the agency’s failure to conduct a fair
procurement, or to ensure that a new procurement would be fair. See, e.g., Anham FZCO v.
United States, 144 Fed. Cl. 697, 724 (2019) (“The irreparable harm plaintiff would suffer absent
an injunction weighs heavily against defendant’s hardships that are, to some degree, of its own
making.”). When the remarkable circumstances of this procurement are considered as a whole,
additional procurement delays and costs pose less of a hardship to State than the hardship that

                                                -19-
would be suffered by SAGAM.

                                         c. Public Interest

        Finally, when “employing the extraordinary remedy of injunction,” a court “should pay
particular regard for the public consequences” of doing so. Weinberger v. Romero-Barcelo, 456
U.S. 305, 312 (1982). There is no dispute that “[t]here is an overriding public interest in
preserving the integrity of the procurement process by requiring the Government to follow its
procurement regulations.” Bona Fide Conglomerate, Inc. v. United States, 96 Fed. Cl. 233, 242
(2010). Although “there is a countervailing public interest in minimizing disruption” to the
procuring agency, Heritage of Am., LLC v. United States, 77 Fed. Cl. 66, 80 (2007), defendant
has not persuaded the court that State’s activities in Senegal would be disrupted by rectifying the
CO’s PIA violation. Rather, the United States might pay a premium for contract services
provided by SAGAM, as contrasted with services provided by Torres, which is a reasonable
price to pay to fulfill the agency’s obligation to treat potential contractors fairly. While State’s
avowed interest in “truly full and open competition” is generally a high priority in procurement
law, Def.’s Suppl. Br. 10, under the circumstances of this procurement the agency’s interests in
the benefits of price competition must yield to its duty to treat prospective contractors fairly,
FAR 1.102-2(c)(3). Accordingly, the court finds that the public interest weighs in SAGAM’s
favor.

                   5. The Court Tailors Injunctive Relief to Minimize Harm

         In addition to prevailing on the merits of its protest, SAGAM has established that it will
suffer irreparable harm if the court withholds injunctive relief, that the balance of hardships tips
in its favor, and that an award of injunctive relief is in the public interest. Thus, the issuance of a
permanent injunction is warranted. In issuing a permanent injunction, this court tailors that relief
so that any harm to the government, private parties, and the public interest is minimized. E.g.,
Heritage of Am., LLC, 77 Fed. Cl. at 79. Having considered the parties’ recommendations as to
the terms of a permanent injunction (all of which are unacceptable to the agency), the court
imposes an injunction that will safeguard fundamental fairness principles.

        At the outset, the court rejects defendant’s favored choice among the actions proposed by
the parties: there is no need to remand the agency’s cancellation and resolicitation plan to the
HCA to obtain a second opinion as to whether the plan is rational and whether the agency should
reconsider its decision not to disqualify Torres. It is now time to fix the mess that State has made
of this procurement, without further delay.

       The only effective solution here is to restore this competition to its status before
cancellation by enjoining the cancellation of the solicitation, enjoining any resolicitation of the
requirement, disqualifying Torres as the beneficiary of improperly disclosed information taken
from SAGAM’s proposal, and having the agency proceed to award the contract to the only
remaining offeror in the competitive range (i.e., SAGAM), if that offeror is found to be a
responsible offeror. Cf. Parcel 49C Ltd. P’ship v. United States, 31 F.3d 1147, 1154 (Fed. Cir.
1994) (holding that, in the context of an improper cancellation, the proper “injunctive remedy
merely restores the status quo ante the illegal cancellation”). This solution is the only one that

                                                 -20-
cures the PIA violation and does not penalize SAGAM for the improper behavior of the CO.

        Defendant argues, nonetheless, that the court does not have the power to compel the
award of a contract to a particular offeror. It is true that the “[s]election of a contractor among
the [offerors] and award of the contract are improper exercises of the court’s authority.” CCL
Serv. Corp. v. United States, 43 Fed. Cl. 680, 688 (1999); see also Scanwell Lab’ys, Inc. v.
Shaffer, 424 F.2d 859, 869 (D.C. Cir. 1970) (“It is indisputable that the ultimate grant of a
contract must be left to the discretion of a government agency; the courts will not make contracts
for the parties.”). But here the court did not make a competitive range of one–that circumstance
is the product of the agency’s evaluation of SAGAM’s and Torres’s proposals and the
contamination of this procurement by the CO. The injunction in this matter bars the agency’s
cancellation of the solicitation and resolicitation, as both of these actions are arbitrary,
capricious, and violate fairness standards, and requires the government to “eliminate the . . . taint
of the prior proceedings.” CACI, Inc.-Fed., 719 F.2d at 1575. The court does not thereby make
a contract between State and SAGAM, it instead requires State to implement its only remaining
lawful option in this procurement. See Great Lakes Dredge & Dock Co. v. United States, 60
Fed. Cl. 350, 371 (2004) (enjoining the agency in that protest “from proceeding with
performance of the contract with any entity other than [the protestor] provided that the Corps
finds [the protestor] to be a responsible contractor”).

        This court has enjoined the improper cancellation of a solicitation on other occasions.
E.g., Tolliver Grp., Inc. v. United States, 151 Fed. Cl. 70, 120 (2020). In rare circumstances, this
type of injunction leaves the agency with only one lawful option, award to the protestor. The
following passage from Parcel 49C discusses the effect of an injunction that was not very
different from the injunction required here:

       In this case, . . . the trial court did not order the award of the contract to Parcel
       49C. Instead, the trial court properly enjoined the illegal action and returned the
       contract award process to the status quo ante any illegality. Before the illegal
       cancellation, [the General Services Administration] had announced the intended
       award to Parcel 49C. The court’s injunction, however, does not order the award
       of the contract to Parcel 49C. The court’s order merely restores the posture of the
       process before the illegal cancellation. The award process is not complete. The
       process will commence from where it left off with the contract award flowing
       from an orderly and lawful proceeding. The Court of Federal Claims’ injunction
       has the effect of returning [the solicitation] to its pre-cancellation posture and
       removing the illegal taint.

31 F.3d at1153 (emphasis added). In that protest, “[t]he Government retain[ed] the power to
proceed with its award process or to terminate the award process for any legal reason.” Id. at
1154 (emphasis added). Here, State has the discretion to terminate the award process if SAGAM
is not a responsible offeror, but there are no other lawful reasons that permit State to avoid an
award to SAGAM.

        Defendant also argues that the disqualification of Torres is beyond the power of the court,
relying on Axiom Resource Management, Inc. v. United States, 564 F.3d 1374 (Fed. Cir. 2009).

                                                -21-
According to defendant, this court would “step into the shoes of the contracting officer” were it
to disqualify Torres from the competition. Def.’s Supp. Br. 12 (citing Axiom, 564 F.3d at
1381-82). The referenced passage from Axiom, however, criticizes the trial court for conducting
a de novo review of potential organizational conflicts of interests, instead of reviewing the record
of the procuring agency’s conduct under the arbitrary and capricious standard. Here, State’s
failure to disqualify Torres after the discovery of the CO’s PIA violation was arbitrary,
capricious, and fundamentally unfair in contravention of the FAR. In directing the agency to
disqualify Torres, the court has adhered to the standard of review in both Axiom and Dell
Federal.

        Finally, defendant raises concerns that the contract award to SAGAM will pose a number
of risks for State and even for SAGAM. Having duly considered these concerns, the court notes
that the difference between SAGAM performing extensions of the incumbent contract through
March 31, 2022, and performing the base year of a new contract, which includes four option
years, through the summer of 2022, does not appear to have much impact on the risks identified
in the CO’s declaration. The court is not persuaded that the risks identified by the CO, in these
circumstances, outweigh the importance of the permanent injunction in favor of SAGAM.

                                       III. CONCLUSION

        For the reasons set forth above, the court GRANTS defendant’s motion to dismiss Count
II of the complaint on mootness grounds, GRANTS SAGAM’s motion for judgment on the
administrative record, and DENIES defendant’s cross-motion for judgment on the administrative
record. SAGAM is entitled to injunctive relief. Specifically, the court DIRECTS State to
restore this competition to its status precancellation, ENJOINS State from cancelling
Solicitation No. 19AQMM18R0332 and from resoliciting the contract requirement, DIRECTS
State to disqualify Torres as the beneficiary of improperly disclosed information taken from
SAGAM’s proposal, and DIRECTS State to proceed to award the contract to the remaining
offeror in the competitive range if that offeror is determined to be responsible.

        Further, the court awards costs to SAGAM pursuant to RCFC 54(d). The clerk shall
enter judgment in favor of SAGAM, consistent with this opinion.

        The court has filed this ruling under seal. The parties shall confer to determine agreed-to
proposed redactions. Then, by no later than Friday, July 23, 2021, the parties shall file a joint
status report indicating their agreement with the proposed redactions, attaching a copy of those
pages of the court’s ruling containing proposed redactions, with all proposed redactions
clearly indicated. 15

        Further, the court reminds the parties of their obligation under paragraph 12 of the
protective order filed on March 31, 2021, to file redacted versions of protected documents for the
public record. If the parties have not already filed redacted versions of their motions and

       15
           The parties’ status report shall also identify proposed redactions, if any are required, to
the court’s order of June 11, 2021, which was filed under seal.

                                                -22-
supporting briefs, they shall file a joint status report by no later than Friday, July 23, 2021,
explaining the reason for the delay.

       IT IS SO ORDERED.

                                                       s/ Margaret M. Sweeney
                                                       MARGARET M. SWEENEY
                                                       Senior Judge

                                                -23-