CLC Construction Company ( 2020 )

ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeal of -- )
)
CLC Construction Company ) ASBCA No. 59110
)
Under Contract No. W91B4N-11-C-8066 )
APPEARANCE FOR THE APPELLANT: Mr. Costa Maroulis
CFO/Contracts Consultant
APPEARANCES FOR THE GOVERNMENT: Scott N. Flesch, Esq.
Army Chief Trial Attorney
MAJ Ronald M. Herrmann, JA
Trial Attorney
OPINION BY ADMINISTRATIVE JUDGE MCNULTY
ON THE GOVERNMENT’S MOTION FOR SUMMARY JUDGMENT
This appeal involves a termination for default of a contract for design and
construction services to be performed in Afghanistan. The government has moved for
summary judgment, arguing appellant engaged in illegal conduct to obtain the
contract making the contract void ab initio, which appellant allegedly has failed to
dispute, and thus appellant’s contract was properly set aside by the government.
STATEMENT OF FACTS (SOF) FOR PURPOSES OF THE MOTION
1. On June 13, 2011, the Bagram Regional Contract Center (the government)
awarded Contract No. W91B4N-11-C-8066 in the total amount of $2,381,456 to
CLC Construction Company (CLC or appellant) for the design and construction of a
courthouse in Afghanistan (R4, tab 1 at 1-2, 5). The contract included by reference,
Federal Acquisition Regulation (FAR) clauses 52.203-8, CANCELLATION,
RESCISSION, AND RECOVERY OF FUNDS FOR ILLEGAL OR IMPROPER
ACTIVITY (JAN 1997); and 52.249-10, DEFAULT (FIXED-PRICECONSTRUCTION)
(APR 1984) (R4, tab 1 at 38-39).
2. On June 15, 2013, the government terminated the contract for its
convenience. The government requested that appellant submit its termination
settlement proposal within 30 days of the termination. (Gov’t mot., ex. G-6)
3. Effective October 3, 2013, in a final decision, the contracting officer
modified the contract, rescinding the termination for convenience and terminating the
contract for default instead. The contracting officer provided the following rationale
for the modification:
It has recently come to the attention of this office that CLC
had access to source selection information, including the
Independent Government Cost Estimate and specific
Government requirements. Companies are prohibited from
knowingly obtaining source selection information before
the award of any contract. CLC intentionally used source
selection information to propose and accept the JCIP
Courthouse contract.
(R4, tab 6) The contracting officer made no reference to rescinding the contract in her
decision.
4. By email received by the Board December 31, 2013, appellant appealed the
contracting officer’s final decision and it was docketed as ASBCA No. 59110.
Appellant filed its complaint on January 24, 2014. The government filed its answer on
April 4, 2014.
5. Shortly thereafter, by letter dated April 12, 2014, the Head of the
Contracting Activity (HCA), Brigadier General (BG) James E. Simpson, found that
appellant, acting through its chief executive officer, Mr. Brad Rhoden, had violated
section 27(e)(1) (Procurement Integrity Act (PIA)) of the Office of Federal
Procurement Policy Act. 1 BG Simpson noted that section 27(e)(1) of PIA
criminalizes violations of sections 27(a) and (b) of the Act, when the violations occur
“for purpose[s] of obtaining a competitive advantage in the award of a Federal agency
procurement.” (Gov’t mot., ex. G-10)
6. PIA 27(e)(1), P.L. 104-106, Sec. 4304 states:
Whoever engages in conduct constituting a violation of
subsection (a) or (b) for the purpose of either:
(A) exchanging the information covered by such
subsection for anything of value, or
1
41 U.S.C. §§ 2101-2107. Rather than cite to PIA as currently codified we have
chosen to use the citation in BG Simpson’s memorandum in the record. We find
no substantive difference between P.L. 104-106 and PIA as codified when the
memorandum was drafted.
2
(B) obtaining or giving anyone a competitive advantage in
the award of a Federal agency procurement contract
shall be imprisoned for not more than 5 years or fined
as provided under Title 18, United States Code or
both. 2
PIA 27(a) and (b) restrict contractors (27(a)) and government
procurement officials (27(b)) from receiving or disclosing any
proprietary or source selection information in exchange for
money, employment, offer of employment, or other thing of
value. PIA 27(a), the section applicable to appellant, states:
During the conduct of any Federal agency procurement of
property or services, no competing contractor or any
officer, employee, representative, agent, or consultant of
any competing contractor shall knowingly-
(1) Make, directly, or indirectly, any offer or promise of
future employment or business opportunity to, or engage,
directly or indirectly, in any discussion of future
employment or business opportunity with, any
procurement official of such agency;
(2) Offer, give, or promise to offer or give, directly or
indirectly, any money, gratuity, or other thing of value to
any procurement official of such agency; or
(3) Solicit or obtain, directly or indirectly, from any
officer or employee of such agency, prior to the award of a
contract any proprietary or source selection information
regarding such procurement. 3
7. Specifically, BG Simpson asserted that Mr. Rhoden had obtained source
selection information, including the government’s independent cost estimate and the
dollar amount of the lowest cost proposal that had been received by the government,
prior to the due date for the offerors’ proposals 4 (gov’t mot., ex. G-10). This alleged
source selection information was conveyed in two emails sent by the government’s
2
Codified at 41 U.S.C. § 2102, 2105
3
Codified at 41 U.S.C. §§ 2102-2104
4
The documents the government contends conveyed this information have been
placed in the record by the government and have not been objected to by
appellant.
3
representative, MSG Arcelio Davis, to Mr. Rhoden on April 13, 2011 (R4, tabs 16-18).
In one email, MSG Davis sent the estimate as an attachment (R4, tabs 16-17). In the
second email, MSG Davis advised, “the lowest so far is [$]2,399,835.54” (R4, tab 18
at 2). BG Simpson also found that “Mr. Rhoden obtained this information for the
purpose of obtaining a competitive advantage in the award of the JCIP Courthouse
contract . . . .” (gov’t mot., ex. G-10). BG Simpson’s Determination and Findings
include no recommendation or declaration that the contract should be rescinded.
8. Although not cited by BG Simpson or the contracting officer, MSG Davis’
second email also stated, “The HVAC system is too small for the building and all the
folks that are bidding are making a[sic] adjustments I will let you know the outcome”
(R4, tab 18 at 2). Mr. Rhoden responded on April 17:
Hey quick question for you? In our electrical plan we had
to add 8 total Air-CON units, this is due to the size of the
bldg. Any less will not sustain the bldg. as requested in the
SOW. 5
(R4, tab 27 at 3) MSG Davis answered, “Yeah that’s right we are trying to make some
adjustment regarding” (id.). To which Mr. Rhoden responded, “[t]hanks because we
came up with (8) 24,000 BTUS. . .” (id. at 2). MSG Davis replied, “That is about
right. According to my cal [sic] I came up with 6 but I was being real cheap. . . . the
lowest is at 23.5 right now” (id.). The conversation continued with Mr. Rhoden
stating, “Thanks . . . but according to our calculations 6 wont [sic] be enough. . .” (R4,
tab 28 at 1). MSG Davis replied:
Yeah I know. Eight is the correct amount but my boss was
trying to cut cost [sic]. Stick with the eight. I’m trying to
get him on the same page and doing it right.
(Id.)
9. The record includes the following abstract of the proposals received by the
government:
5
The SOW as it pertains to the HVAC system is in the nature of a design specification
requiring an HVAC system capable of maintaining a year round temperature of
70 degrees (R4, tab 1 at 12). The SOW does not specify the number of units to
be supplied. Nor does the record include any plans and specifications that may
have been provided to the potential offerors, which may have indicated the
number of air conditioning units required.
4
Offeror Technical Rating 6 Price DBA
CLC Construction Co. Acceptable $2,348,424.00 $33,032.00
Redacted Failed $1,749,338.00 $1,400.00
Redacted Failed $1,697,427.00 $4,800.00
Redacted Failed $1,626,124.00 $6,504.00
Redacted Failed $1,494,786.00 $5,000.00
Redacted Failed $1,466,282.00 $7,900.00
Redacted Failed $1,449,412.00 $3,400.00
Redacted Not Reviewed $2,394,115.93 $14,279.00
Redacted Failed $3,020,150.00 $9,000.00
Redacted Not Reviewed $4,950,504.00 $40,306.00
(Gov’t mot., ex. G-3 at 1)
10. By letter to the Board dated May 5, 2014, appellant requested more time to
respond to the government’s submission of the Rule 4 file. Appellant advised that its
personnel were scattered overseas and that it needed additional time in which to submit
responsive documents. (Bd. corr. ltr. dtd. May 5, 2014) The government interposed no
objection to appellant’s request by letter dated May 6, 2014 (Bd. corr. ltr. dtd. May 6,
2014). The Board then issued an order, giving appellant until June 9, 2014 to submit its
documents (id.). Several additional time extensions were requested and granted (id.).
Appellant finally submitted its supplement to the Rule 4 file in June 2015 7 (id.).
11. In a memorandum for appellant dated May 31, 2014, the contracting officer
asserted he had reviewed the evidence cited in BG Simpson’s memorandum, concurred
with the findings, and issued a Notice of Affirmative Government Claim, in which he
indicated the government intended to rescind the contract pursuant to FAR 52.203-8,
6
The record indicates that the reason the government found the failed offers
unacceptable was due to mobilization and quality assurance/quality control
plans being poorly developed (gov’t. mot., ex. G-3).
7
Discussed in greater detail in (SOF ¶ 15).
5
CANCELLATION, RESCISSION, AND RECOVERY OF FUNDS FOR ILLEGAL OR
IMPROPER ACTIVITY, and to seek to recover the $396,327.84 paid to appellant for its
performance prior to the termination. The contracting officer gave appellant 60 days to
provide any evidence it might have to forestall the government from acting as it advised
it intended to. (Gov’t mot., ex. G-11)
12. In a final decision dated August 25, 2014, the contracting officer stated
appellant had acknowledged receipt of the Notice of Affirmative Government Claim,
but had neither disputed the government’s contentions, nor provided any evidence or
justification to prevent the contracting officer from issuing the final decision. In the
final decision the contracting officer rescinded the contract and asserted a government
claim against appellant for $396,327.84. The final decision included a demand for
payment and the standard appeal rights language informing appellant it had 90 days in
which to appeal the decision to this Board. (Gov’t mot., ex. G-12)
13. By email dated August 28, 2014, appellant responded to an inquiry from
the government advising that the debt had been entered into the government’s Contract
Debt System. Appellant indicated it would be appealing the contracting officer’s
decision within 90 days. (Gov’t mot., ex. G-16)
14. The Board has no record of appellant ever having filed an appeal from the
final decision dated August 25, 2014. 8
15. In a lengthy document received by the Board on June 8, 2015, entitled
“Response to Government’s Answer,” appellant contests the termination for default,
making detailed, specific factual contentions, which dispute the basis for finding that it
had violated the PIA. The document was accompanied by two “Letters of Affidavit”
and many emails concerning several projects in Afghanistan predating the award of the
8
Appellant, a pro se litigant, in its response to the government’s motion asserts that it
contacted the government’s Expeditionary Contracting Cell-Afghanistan after it
received the second contracting officer’s decision for advice because it lacked
the financial ability to retain counsel and was advised that since there was
already an appeal taken with respect to the termination for default it was not
necessary to file another appeal (app. resp at 1). Although pro se litigants are
generally afforded a degree of leniency with regard to administrative matters
and pleadings, they are not exempt from otherwise complying with legal
requirements. See Elizabeth Construction Company, ASBCA No. 60723,
17-1 BCA ¶ 36,839 at 179,519; Environmental Safety Consultants, ASBCA
No. 47498, 00-1 BCA ¶ 30,826 at 152,143. Assuming appellant’s contentions
are true and that appellant has relied on this advice, it would not excuse
appellant’s failure to have appealed the contracting officer’s decision.
6
contract for the courthouse that is the subject of this appeal. 9 From this pleading and
the supporting documents accompanying it we distill, summarize and find evidence
supporting the following factual assertions:
a) The type of information that appellant is accused of
receiving improperly was routinely exchanged by the
government’s engineering representatives and prospective
contractors for multiple projects leading up to the award of
the courthouse project that is the subject of this appeal;
b) None of the documentation at issue that appellant
received from the government was marked as being source
selection sensitive material; and
c) The government regularly solicited cost and pricing
information from its prospective contractors for projects it was
considering and that the specific cost and pricing information,
the government’s estimate for the courthouse project that the
government contends was improperly received by appellant,
may have originated with appellant.
(App. resp. to gov’t answer at tabs A at 1, B)
16. With respect to the government’s assertions that it had improperly received
proposal price information prior to the award appellant, in part, pleaded:
9
Under Board Rule 13(b) the record may include pleadings as the Board deems is
appropriate. The government and the Board have treated the documents
appellant submitted as attachments to its pleading as a supplement to the Rule 4
file and as appellant’s response to government discovery requests (see Bd corr.
ltrs. dtd. May 6, 2014; May 8, 2014; June 9, 2014; August 15, 2014; September
10, 2014; September 29, 2014; January 28, 2015; February 4, 2015; February 9,
2015; April 2, 2015; April 22, 2015; May 3, 2015; May 5, 2015; May 6, 2015;
June 6, 2015; September 8, 2015; May 22, 2016; May 24, 2016). This
confusion appears to have originated with appellant’s conflation of Rule 4 and
its response to government discovery requests (id.). The government
acknowledged this possibility in its August 15, 2014 objection to documents
appellant had submitted in digital form earlier in June 2014 (id.). We find it
appropriate in the circumstances of this appeal to include this document and its
attachments in the record to be considered in deciding the government’s
motion. In accordance with Board Rule 6 (d) the Board accepts these
documents as a pleading in this appeal.
7
There is absolutely no indication that any of this data is
proprietary to any other bidder. In two exchanges on
13 April, MSG Davis refers to price – nowhere does MSG
Davis state that these are proposal prices, however. Only
the Government response, in Answer 9, has added in
brackets “[proposed price]” – these words do not
originate in MSG Davis’ email, and the Government is
clearly adjusting the record to match their requirements.
(Emphasis in original) Appellant also asserted that it was highly unlikely that any
proposal had been received by the government five days prior to the due date for the
proposals. (App. resp. to gov’t answer at 7 ¶ 3)
17. Appellant also averred that it never paid, offered to pay, or offered
employment to MSG Davis (app. resp. to gov’t answer, tab A at 2).
PARTIES’ POSITIONS
The government contends appellant engaged in illegal conduct, which renders
the contract void ab initio, thus eliminating the basis for this appeal. It further argues
that, because appellant did not appeal the contracting officer’s August 25, 2014 final
decision, appellant may not challenge this conclusion here, though the government
also provides other bases to support the factual findings it believes are sufficient to
support summary judgment in its favor. Appellant asserts it has disputed that it
engaged in illegal conduct with its appeal of the initial contracting officer’s decision.
DISCUSSION
The government’s motion first relies on the premise that the appellant has not
contested, and is now unable to contest, the finding of the contracting officer that
appellant engaged in illicit or improper activity. We find this premise to be false and
deny the government’s motion as discussed below. We also find that the government
has not met its burden of proving uncontested material facts to support a finding of
violation of the Procurement Integrity Act or other grounds to set aside the contract.
I. Standards for Summary Judgment
Summary judgment requires that there be no material facts in dispute.
Eastern New Mexico University-Roswell, ASBCA No. 57110, 12-2 BCA ¶ 35,090
at 172,336 (citing Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390
(Fed. Cir. 1987)). Material facts are facts that “might affect the outcome of the suit.”
Revenge Advanced Composites, ASBCA No. 57111, 11-1 BCA ¶ 34,698 at 170,883
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)). The movant is
8
responsible for establishing that there are no genuine issues in dispute. Celotex Corp.
v. Catrett, 477 U.S. 317, 330 (1986). Doubts over factual issues are resolved in favor
of the opposing party. Mingus Constructors, 812 F.2d at 1390. Summary judgment
requires that we view the pleadings and evidence in light most favorable to the
non- movant and resolve all reasonable inferences in the non-movant’s favor.
Dairyland Power Co-op. v. United States, 16 F.3d 1197, 1202 (Fed. Cir. 1994).
The Appeal Is Reviewable
The government’s contention that failure to timely appeal a contracting officer’s
final decision renders it unreviewable is correct. Under the Contract Disputes Act
(CDA), 41 U.S.C. §§ 7103(g), 7104, a contracting officer’s decision becomes “final and
conclusive and is not subject to review by any forum, tribunal, or Federal Government
agency” unless a contractor appeals the decision to an agency board of contract appeals
within 90 days from date of receipt of the decision or brings an action directly on the
claim in the United States Court of Federal Claims within 12 months of receipt of the
decision. In accordance with the plain language of the CDA, we have held that failure to
timely appeal a final contracting officer’s decision renders the decision final and
conclusive. RXDC, Inc., ASBCA No. 33356, 88-2 BCA ¶ 20,738 at 104,784 (citing
Essex Shirt Company, ASBCA No. 3278, 57-1 BCA ¶ 1294; Standard Stevedoring Co.,
ASBCA No. 5171, 59-2 BCA ¶ 2320). 10
However, the government’s argument that appellant’s failure to separately
appeal the contracting officer’s second decision should foreclose its challenge of the
contract termination ignores the fact that appellant had submitted an appeal disputing
the contracting officer’s first decision that it had engaged in illicit or improper activity
prior to the contract’s award. This was the stated basis for the termination for default,
which appellant disputed when it appealed that decision. (SOF) ¶¶ 3, 4, 11-13) The
government’s second final decision, which appellant failed to appeal, asserts a new
claim under a new legal theory, but it is based on facts that are identical to those used to
support the decision to terminate the contract for default (SOF ¶¶ 3, 5). These facts
appellant has undisputedly expressed its disagreement with by appealing the
termination decision. We are unaware of any authority that would support the
proposition that appellant is required to formally reiterate its denial of the facts
underlying the dispute when the government adds a new legal theory, and the
10
Although Essex Shirt Company and Standard Stevedoring Co. predate the CDA we
have continued to hold them to be valid law because the underlying rationale
remains the same whether the requirement for a timely appeal to avoid holding
the final decision becoming final and conclusive, arises under the contract’s
Disputes clause or from the CDA. Charles G. Williams Constr. Inc., ASBCA
Nos. 51329, 51637, 99-2 BCA ¶ 30,409 at 150,341.
9
government has cited none. 11 We decline to require that facts already denied must be
denied again in order to preserve the fact that they are disputed when the government
adds a new legal theory by issuing a new contracting officer’s final decision. To do so
would exalt form over substance. The present appeal involves a situation somewhat
analogous to pre-CDA appeals where the government would move to dismiss an appeal
as being premature because the appellant had failed to submit the claim to the
contracting officer for decision, but the Board would retain jurisdiction because the
contracting officer’s position was known. See American Electric Contracting Corp.,
ASBCA No. 18937, 74-1 BCA ¶ 10,609; Whittaker Corp., ASBCA No. 17730,
75-1 BCA ¶ 11,179. The fact that appellant disputes that it engaged in improper
activity, was known to the government and the dispute was not extinguished by
appellant’s failure to appeal the government’s second decision asserting the new claim.
II. Even If Undisputed, The Facts Do Not Support Summary Judgment
The government also argues that appellant’s contentions are not sufficient to
avoid summary judgment because they are mere unsupported, conclusory allegations,
and that appellant has not actually disputed the facts, but instead makes legal
arguments regarding their effect (gov’t reply at 1-3). See Keystone Capital Servs.,
ASBCA No. 56565, 09-1 BCA ¶ 34,130 at 168,753 (“Mere arguments, bald assertions
or speculation of counsel are insufficient to defeat a motion for summary judgment.”);
Applied Cos. v. United States, 144 F.3d 1470, 1475 (Fed. Cir. 1998) (“It is well settled
that a ‘conclusory statement on the ultimate issue does not create a genuine issue of
fact.’”) (internal citation omitted). The nonmoving party is not required to present its
entire case in response to a summary judgment motion to avoid defeat, but it must
demonstrate that evidentiary conflicts exist on the record as to material facts at issue.
Armco, Inc. v. Cyclops Corp., 791 F.2d 147, 149 (Fed. Cir.1986); Barmag Barmer
Maschinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 835-36 (Fed. Cir.
1984). A nonmoving party may not simply rest upon vague allegations of disputed
facts in opposing summary judgment. The purpose of summary judgment is “to pierce
11
The government argues our decision in Military Aircraft Parts, ASBCA No. 60139,
16-1 BCA ¶ 36,390, supports this proposition. The facts in Military Aircraft
Parts are distinguishable from this appeal. In Military Aircraft Parts, the
contractor failed to timely appeal a contracting officer’s decision terminating
the contract for default. Id. at 177,424. Subsequently, after the appeal period
had expired, the contractor filed a claim that, although styled as a breach of
contract, was essentially a challenge of the termination. Id. at 177,425. We
held in Military Aircraft Parts that the contractor was bound by its failure to
have timely appealed the termination decision. Id. As discussed above,
appellant timely appealed and thus disputed the facts the government is now
arguing cannot be disputed due to its failure to have appealed the government’s
second final decision.
10
the pleadings and to assess the proof in order to see whether there is a genuine issue
for trial.” Penn Screw & Machine Works, Inc., ASBCA No. 32382, 89-3 BCA
¶ 22,205 at 111,694 (internal citations omitted).
We need not determine whether appellant’s contentions are mere unsupported
conclusory allegations because not only must there be no genuine issue as to any
material fact, but the moving party must also be entitled to judgment as a matter of
law. Dongbuk R&U Engineering Co., ASBCA No. 58300, 13 BCA ¶ 35,389
at 173,637. In this appeal, the facts relied upon by the government do not support a
finding that it is entitled to judgment as a matter of law.
The Undisputed Evidence Does Not Support Finding The PIA Was Violated
The contracting officer’s decision to rescind the contract relies on the finding
made by the HCA, BG Simpson, who based his findings on two specific bits of
information appellant is alleged to have received improperly in violation of the PIA;
(1) the government’s internal cost estimate, and (2) the price of the lowest cost proposal
that had been received by the government (SOF ¶¶ 5, 7). If neither of these bits of
information fits within the PIA’s definition of prohibited procurement information the
government would be unable to establish that it is entitled to summary judgment as a
matter of law, regardless of whether appellant has properly disputed the facts
underlying the contracting officer’s decision to rescind the contract.
As is relevant to the circumstances of this case, the PIA prohibits a contractor
from knowingly receiving contractor bid, or proposal, or source selection information
before the award of a Federal agency procurement contract to which the information
relates. 41 U.S.C. § 2102(b). The administrative actions section of the PIA, § 2105(c),
permits the government to rescind the contract in two situations: when the contractor, or
someone acting in its behalf, has been convicted of an offense punishable under §
2105(a), or, as is more applicable here because there is no evidence that appellant or
anyone acting on its behalf has been convicted of violating PIA, when the head of the
agency12 that awarded the contract has determined, based upon a preponderance of the
evidence, that the contractor or a person acting for the contractor has engaged in
conduct constituting a violation of 27(e)(1) of the Act, i.e., §2102(b). PIA defines
“contractor bid or proposal information” as:
12
The statutory text of the PIA refers to the agency head, while FAR 52.203-8
(a)(2)(ii) refers to the “head of the contracting activity,” also known as the
HCA, which is different. We need not discuss this incongruity because as
discussed below we find the record does not support finding the information at
issue constitutes prohibited information. Accordingly, in this appeal it does not
matter whether the HCA or the head of the agency made the determination.
11
(A) Cost or pricing data (as defined in section 2306a(h) of
title 10 with respect to procurements subject to that section
and section 3501(a) of this title with respect to
procurements subject to that section).
(B) Indirect costs and direct labor rates.
(C) Proprietary information about manufacturing
processes, operations, or techniques marked by the
contractor in accordance with applicable law or regulation.
(D) Information marked by the contractor as “contractor
bid or proposal information”, in accordance with
applicable law or regulation.
and “source selection information” as:
(A) Bid prices submitted in response to a Federal agency
solicitation for sealed bids, or lists of those bid prices
before public bid opening.
(B) Proposed costs or prices submitted in response to a
Federal agency solicitation, or lists of those proposed costs
or prices.
(C) Source selection plans.
(D) Technical evaluation plans.
(E) Technical evaluations of proposals.
(F) Cost or price evaluations of proposals.
(G) Competitive range determinations that identify
proposals that have a reasonable chance of being selected
for award of a contract.
(H) Rankings of bids, proposals, or competitors.
(I) Reports and evaluations of source selection panels,
boards, or advisory councils.
12
(J) Other information marked as “source selection
information” based on a case-by-case determination by the
head of the agency, the head’s designee, or the contracting
officer that its disclosure would jeopardize the integrity or
successful completion of the Federal agency procurement
to which the information relates.
41 U.S.C. § 2101(2), (7).
A. Receipt of The Internal Government Cost Estimate Is Not A Violation of The
PIA
Appellant in its response does not dispute that it received the estimate as the
government asserts, instead it argues that it did not “knowingly” receive the estimate
because it was not marked as source selection information (app. resp. at 2). This
argument reiterates appellant’s contentions made previously in its pleading (SOF
¶ 15). This argument alone is insufficient to carry the day for appellant. The Supreme
Court has ruled that “knowingly” when used in the criminal context does not require
knowledge of the law alleged to have been violated, only knowledge of the facts
constituting the offense. Bryan v. United States, 524 U.S. 184, 193 (1998) (citing
United States v. Bailey, 444 U.S. 394, 408 (1980)). Accordingly, all that is needed to
meet the knowingly requirement set forth in the PIA is evidence that appellant
understood the information was received, so long as the information is of a type that is
prohibited by the PIA. Here, appellant acknowledges receipt of both the estimate and
what the government asserts was the lowest proposal price it had received (SOF
¶¶ 15-16). Despite appellant’s contentions that it did not knowingly receive it because
it was not marked, or that appellant did not know it was impermissible for it to have
the information, or that it was not clear to appellant that the price conveyed was
another offeror’s, there is no dispute in the record before us regarding whether
appellant knowingly received the information at issue. Appellant’s arguments go to
whether it knew, or should have known it was violating the law, not to whether it had
received the information. Appellant’s contentions do nothing to dispute the allegation
that it had knowledge of the facts constituting the offense.
We next consider whether the estimate fits within the prohibited categories of
information that should not be received. We find the estimate does not fit within the
definition of “source selection information” set forth in PIA, because the plain
language of the statutory text of § 2107(a) of the PIA, which includes express
definitions of “source selection information” does not include the government
estimate. 13 This very issue was addressed by the district court in United States
13
Whether CLC was otherwise prohibited from receiving the government estimate is a
different question which we do not opine upon.
13
v. Bowling, 108 F. Supp. 3d 343, 348 (E.D.N.C. 2015), which (though not binding on
us) persuasively came to the same conclusion. Therefore, even though there is no
dispute appellant received this information, it was not a violation of PIA to have it and
the government is not entitled to judgment as a matter of law on that ground. Nor does
the government estimate constitute “contractor bid or proposal information” because it
was not submitted to a federal agency as part of, or in connection with, a bid or
proposal to enter into a federal agency procurement contract. See 41 U.S.C. § 2101(2).
B. The Proffered Evidence Does Not Support A Finding That CLC Received
Proposal Price Information
The entirety of the evidence proffered by the government in support of its
allegation that appellant improperly received proposal price information in violation of
the PIA is a single, cryptic statement in an email MSG Davis sent to appellant on
April 13, 2011, five days before the proposals were due (SOF ¶ 7). Appellant has
disputed this is proposal price information. In its “Response to Government Answer”
pleading, appellant notes that there is nothing expressly stating that this cryptic
statement is a reference to a proposal price. While the context of the email message is
such that we might dismiss appellant’s contentions in this regard as being mere
unsupported argument, the record includes additional evidence supporting appellant’s
contention. The government included an abstract of the proposal prices it had received
in the record (SOF ¶ 9). None of the prices listed in the abstract match the price
transmitted in the email message from MSG Davis to appellant. This raises a question
of fact as to whether MSG Davis was referring to another proposer’s price as the
government contends, or something else. Because we cannot resolve this question on
the basis of the evidence before us, we may not grant the government summary
judgment on this basis.
C. The Evidence Regarding The Other Prohibited Information Allegation Does
Not Support Summary Judgment
Although not cited in the HCA’s factual findings the contracting officer relied
on for his/her final decision, the government also argues that appellant received source
selection information related to the government’s technical evaluation (gov’t mot.
at 20). 14 The government cites to several email chains attached to its motion as
exhibits and asserts that the most blatant example is an email in which MSG Davis
informed appellant that it was initially disqualified, but that he had been able to
convince the technical team to give appellant an “acceptable” rating. 15 We do not
14
We make no ruling regarding whether grounds not subject to a finding by the head
of the agency or the HCA can be relied upon to cancel or rescind a contract.
15
The basis for the initial disqualification of appellant’s proposal appears to have been
that it was viewed as exceeding the 50-page limit set forth in the solicitation.
14
agree with the government that this “blatant” example or the other emails cited,
constitute prohibited information under PIA. Although not articulated by the
government in its motion, the government is presumably viewing these emails as
“source selection information” pursuant to § 2101(7)(D), (E), (H), or (J), which
include technical evaluation plans, technical evaluations of proposals, rankings of bids,
proposals, or competitors, and “[o]ther information marked as ‘source selection
information’ based on a case-by-case determination by the head of the agency, the
head’s designee, or the contracting officer that its disclosure would jeopardize the
integrity, or successful completion”, of the procurement to which the information
relates. The information that the evaluation team had changed its initial evaluation of
appellant’s proposal from unacceptable to acceptable is neither a technical evaluation
plan, nor the technical evaluation of the proposals. It is only a reference to the rating
assigned to the proposal after the evaluation of appellant’s proposal had occurred.
Revealing only the rating, without more, appears to have conferred no competitive
advantage to appellant and the government has failed to provide any evidence that
receiving this information was advantageous to appellant in any way. The evaluation
can only occur after the proposals have been submitted and there is no evidence in the
record before us that there was any opportunity to revise the proposals after they had
been submitted. Nor does it constitute rankings of bids, proposals or competitors,
which would require that other bids, proposals or competitors’ ratings be disclosed, so
that appellant’s relative position would also be known. Additionally, the record
indicates that none of the email relied upon by the government was denoted as “source
selection information”, and there is no evidence that the head of the agency, his or her
designee, or the contracting officer has determined that the disclosure of these emails
would jeopardize the integrity or successful completion of the procurement.
These emails also include a discussion of the number of air conditioning units
required, which the government may be relying on in its argument without expressly
stating so (SOF ¶ 8). The record is insufficiently clear at this time for us to determine
whether the exchange of this information constitutes a violation of the PIA. We note
this information does not constitute a technical evaluation plan, a technical evaluation
of a proposal, ranking of bids, or competitors, and is not marked as “source selection
information.” Nor can we say that the record undisputedly establishes that the
disclosure of this information jeopardized the integrity of the procurement that it
relates to. First, the emails suggest that the information may have been shared with the
other offerors. Additionally, appellant has asserted that this type of information was
regularly shared between the government and offerors for the types of projects it bid
on and provided examples of same (SOF ¶ 15; app. resp. to gov’t answer, tab B).
The cited email chain indicates that when the attachments to the proposal were
not included, the proposal did not exceed the page limitation. (R4, tabs 32-33)
15
Finally, in order to constitute an offense under the PIA, which would permit the
government to rescind the contract, the information received would have to have been
in exchange for payment, an offer of employment, or to gain a competitive advantage.
41 U.S.C. §§ 2104(d)(2), 2105(c)(1)(B)(ii). There is no allegation, much less any
evidence, that appellant paid for, or made an offer of future employment, for this
information. The only evidence in the record in this regard is that appellant made no
payments or offers of employment (SOF ¶ 17). Many issues of fact remain for which
there is no evidence in the record, to determine whether appellant received any
competitive advantage from the receipt of this potentially “other prohibited
information.”
Even had we found the government’s argument that MSG Davis’s messages
constitute impermissible source selection information under § 2102(7)(D) or (E), (H),
or (J) of PIA compelling, the government would not be entitled to summary judgment
as a matter of law because, as noted previously, the implementing regulations require
that the HCA, BG Simpson, recommend that the agency head determine that the
contractor has engaged in conduct constituting an offense punishable under the PIA for
the purpose of voiding or rescinding the contract. FAR 3.104-7(b)(5). There is no
evidence in the record that this has occurred.
III. The Government’s Alternative Argument Is Also Unpersuasive
The government argues in the alternative the contract is void ab initio as matter
of law, and that it is entitled to summary judgment because there is no genuine issue of
fact that appellant violated the PIA (gov’t. mot. at 16-20). As discussed above, we
find the record does not undisputedly establish that appellant obtained source selection
information as that term is defined in the PIA. The government argues appellant
improperly obtained source selection information as defined in FAR 2.101 (gov’t. mot.
at 18). The FAR definition of source selection information essentially mirrors the
definition found in the PIA at 41 U.S.C. § 2101(7). We find there is no material
difference in how the term is defined in the PIA and the FAR. Accordingly, we find
the government’s argument that the record undisputedly violated the PIA and the
FAR’s prohibitions against receiving source selection information unpersuasive.
16
CONCLUSION
For all of the foregoing reasons the government’s motion is denied.
Dated: April 15, 2020
CHRISTOPHER M. MCNULTY
Administrative Judge
Armed Services Board
of Contract Appeals
I concur I concur
RICHARD SHACKLEFORD J. REID PROUTY
Administrative Judge Administrative Judge
Acting Chairman Vice Chairman
Armed Services Board Armed Services Board
of Contract Appeals of Contract Appeals
I certify that the foregoing is a true copy of the Opinion and Decision of the
Armed Services Board of Contract Appeals in ASBCA No. 59110, Appeal of CLC
Construction Company, rendered in conformance with the Board’s Charter.
Dated: April 17, 2020
PAULLA K. GATES-LEWIS
Recorder, Armed Services
Board of Contract Appeals
17