Kwr Construction, Inc. v. United States ( 2015 )

In the United States Court of Federal Claims
No. 15-156C
(Filed: October 15, 2015)*
Order originally filed under seal on September 22, 2015
)
KWR CONSTRUCTION, INC. )
)
Plaintiff, )
) Bid Protest; Discovery;
v. ) Supplementation of the Administrative
) Record
THE UNITED STATES, )
)
Defendant. )
)
Anne E. Carl, Bisbee, AZ, for plaintiff.
Matthew P. Roche, Civil Division, United States Department of Justice,
Washington, DC, with whom were Benjamin C. Mizer, Principal Deputy Assistant
Attorney General, Robert E. Kirschman, Jr., Director, and Franklin E. White, Jr.,
Assistant Director, for defendant. Erika L. Whelan Retta, Commercial Law and
Litigation Directorate, Air Force Legal Operations Agency, Joint Base Andrews, MD, of
counsel.
ORDER DENYING PLAINTIFF’S MOTION FOR DISCOVERY AND FOURTH
MOTION TO SUPPLEMENT THE ADMINISTRATIVE RECORD
FIRESTONE, Judge.
Pending before the court are motions by plaintiff KWR Construction, Inc.
(“KWR”) for supplementation of the administrative record (ECF No. 111) and discovery
(ECF No. 113) in support of its bid protest action against defendant United States (“the
government”) in connection with the United States Air Force’s (“the agency”) July 28,
2014 award of four multiple award construction contract (MACC) indefinite-delivery
indefinite-quantity (IDIQ) contracts for construction work at Luke Air Force Base,
Arizona.
KWR was eliminated from the competition because its offer price was determined
to be incomplete, unreasonable, and unrealistic. On February 18, 2015, KWR filed its
complaint protesting that determination in this court. KWR also filed a motion to
supplement the administrative record (ECF No. 5) with the original tape recording of a
conversation between the contracting officer and Al Anderson of KWR; a typewritten
transcript was submitted as part of the administrative record. On March 4, 2015, KWR
filed a motion for judgment on the administrative record and a second motion to
supplement the administrative record (ECF No. 15). KWR’s second motion to
supplement the administrative record offered an affidavit of Arthur Wayne Rivas, who
was president of KWR and provided information regarding a phone call between the
contracting officer and Mr. Rivas on April 23, 2014. On March 20, 2015, the court heard
oral argument on cross motions for judgment on the administrative record. On March 23,
2015, the court entered an order vacating the agency’s decision to eliminate KWR from
the competition and remanding the matter to the agency with instructions to either
provide a reasoned explanation for its rejection of KWR’s price proposal or to adopt a
different decision with a reasoned explanation. KWR’s motions to supplement the
administrative record were denied as moot.
On remand, the agency determined that, in light of the issues identified in the
court’s remand order, the best course of action would be to have KWR’s price proposal
re-evaluated by Tauny Woo, a member of the source selection team who had not
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previously evaluated KWR’s price proposal. See Administrative Record (“AR”) 5975.
At the conclusion of the remand, the agency determined that KWR’s price proposal was
unacceptable. See AR 5967.
On April 15, 2015, KWR filed its challenge to the Air Force’s decision on remand.
KWR also filed a third motion to supplement the administrative record (ECF No. 50)
with affidavits of Sophie Moore and Al Anderson regarding “contracting officer duties
and “best practices” vis-à-vis KWR’s unique positioning and the cost savings that it
achieves based on its long-standing presence as an Arizona-based 8(a) General
Contractor with in-house extensive electrical contracting expertise.” Oral argument was
held on May 27, 2015. On June 2, 2015, the court entered an order questioning whether
the agency’s decision on remand was procedurally proper and requiring supplemental
briefing “addressing the authority of the contracting officer to issue a decision on remand,
taking into account the roles of Source Selection Authority, Procurement Contracting
Officer, and Source Selection Evaluation Board.” In light of the issues raised in the
court’s order, the agency determined to undertake corrective action by re-evaluating
KWR’s price proposal using the same three members of the Source Selection Evaluation
Board that evaluated KWR’s pre-award price proposal. On June 9, 2015, the agency
filed a motion for voluntary remand, which the court granted on June 10, 2015.
On remand, the Source Selection Authority concluded that KWR’s price proposal
was complete, reasonable, but unrealistic. See AR 6068. Accordingly, the agency did
not award KWR the MACC IDIQ contract. See AR 6071.
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In its fourth motion to supplement the administrative record, KWR provides an
affidavit and several e-mails that KWR argues are needed for the court to understand
KWR’s second motion for judgment on the administrative record on all matters not
requiring discovery and KWR’s motion for discovery. Specifically, KWR seeks to
supplement the administrative record with two exhibits: (1) an affidavit of Al Anderson,
who manages KWR and previously managed 1MD Inc., which was KWR’s predecessor
company and did business as Castro Electric at Luke Air Force Base; and (2) a series of
e-mails between counsel for KWR and counsel for the government that followed a
conversation regarding the government’s June 9, 2015 request for voluntary remand.
KWR asserts that the affidavit and e-mails demonstrate that the agency’s evaluation
process had become “tainted” due to a wire-cutting incident being attributed to Castro
Electric, and therefore KWR, in connection with another contract at Luke Air Force
Base.1 Mr. Anderson also states that the independent government cost estimate (“IGE”),
which was used to gauge KWR’s price proposal, was not supported.
1
In a series of e-mails accompanying Mr. Anderson’s affidavit, an agency official questioned
whether Castro Electric had sufficient experience to be awarded a certain contract, unrelated to
the one at issue in this case, apparently with the understanding that the contract required 3 years
of experience. The agency official also implied that Castro Electric was responsible for a wire-
cutting problem under another contract. The contracting officer responded: “It is unfortunate
that the shops had to accomplish contractor work to achieve compliance; however, that should
never be the case with any contract related work. It is ultimately the contractor’s responsibility
to ensure that the project is completed per the specification and Statement of Work in the
contract. If there is in fact a regulation in an AFI or specification that requires a contractor to
have three (3) years’ experience to work on the airfield, I need that document to cross reference
against the original terms and conditions of the contract.” See Pl.’s Fourth Mot. to Suppl. the
Admin. R., Ex. 1-B at 3.
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In its motion to engage in discovery, KWR seeks an order compelling production
by the agency of (1) e-mails, notes, recording, and other correspondence referencing
KWR, 1MD-Inc., and Castro Electric; (2) copies of the handwritten evaluation checklists
that were produced during evaluations of all offerors for the solicitation at issue; (3)
written records of hours expended by government personnel specific to KWR’s protests
at the agency level, at the United States Government Accountability Office, and at this
court; and (4) a certificate from the person in charge of e-mail or data storage archives for
the agency that the e-mail or data provided to KWR as a result of discovery comprises a
complete record. KWR also requests depositions of several agency staff and counsel for
the government.
For the reasons that follow, KWR’s motion for discovery and motion to
supplement the administrative record are DENIED.
I. Legal Standards
Rule 52.1 of the Rules of the United States Court of Federal Claims provides for
review of agency action based upon the administrative record. Under this rule, “the focal
point for judicial review should be the administrative record already in existence, not
some new record made initially in the reviewing court.” Inforeliance Corp. v. United
States, 118 Fed. Cl. 744, 747 n.6 (2014) (citations omitted). In general, “supplementation
of the record should be limited to cases in which ‘the omission of extra-record evidence
precludes effective judicial review.’” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d
1374, 1380 (Fed. Cir. 2009) (citing Murakami v. United States, 46 Fed. Cl. 731, 735
(2000), aff’d, 398 F.3d 1342 (Fed. Cir. 2005)). Moreover, “discovery of the contracting
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officer’s reasoning is not lightly to be ordered and should not be ordered unless record
evidence raises serious questions as to the rationality of the contracting officer’s
[decision].” Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d
1324, 1341 (Fed. Cir. 2001); see also Info. Tech. & Applications Corp. v. United States,
316 F.3d 1312, 1323 n.2 (Fed. Cir. 2003). Finally, in order to supplement the record or
obtain discovery, a plaintiff must show (1) either a motivation for the agency to have
acted in bad faith or conduct that is hard to explain absent bad faith, and (2) that
discovery could lead to evidence that would afford the level of proof sufficient to
overcome the presumption of regularity and good faith. See Inforeliance Corp., 118 Fed.
Cl. at 747 (citing Beta Analytics Int’l, Inc. v. United States, 61 Fed. Cl. 223, 226 (2004)).
II. Discussion
KWR argues that Mr. Anderson’s affidavit and the e-mails KWR has provided
show that the contracting officer in this matter, Eric Hinsch, was inappropriately
influenced by the description of the wire-cutting incident involving Castro Electric and
that the e-mails might have motivated the agency to evaluate KWR’s proposal with
“special scrutiny in order to deny KWR a contract award.” Pl.’s Fourth Mot. to Suppl.
the Admin. R., Ex. 1-A ¶ 17. In addition, KWR argues that its second exhibit, an
exchange of e-mails between KWR’s counsel and the government’s counsel in this case,
“strongly suggest that . . . the evaluation process had become ‘tainted’ and KWR was
highly unlikely to ever receive a contract from this MACC IDIQ Solicitation or this
protest.” Id. 2. Specifically, KWR argues, the government’s counsel indicated that KWR
would never be awarded a contract. Id.
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In support of its motion for discovery, KWR acknowledges that discovery is rarely
appropriate in a bid protest but argues that discovery is necessary in this case to facilitate
meaningful judicial review. In particular, KWR asserts that it has met the standards set in
Inforeliance Corp. v. United States, 118 Fed. Cl. at 747.
In response, the government argues that KWR’s proffered evidence is not new and
does not demonstrate bias on the part of the agency. First, while the government
recognizes that its counsel made some “regrettable” comments during a phone
conversation with counsel for KWR, the e-mails demonstrate that he later apologized
and, more importantly, he also contemporaneously explained that he was speaking only
for himself and his comments did not reflect the views of the agency. In addition, the
government argues that KWR’s proffered affidavit and e-mails with regard to the wire-
cutting incident under Castro Electric’s contract do not demonstrate bias or bad faith
requiring supplementation of the administrative record or discovery with regard to the
decision to reject KWR’s proposal on cost realism grounds in this case. Finally, the
government asserts that KWR’s motion for discovery should also fail because KWR has
not demonstrated how discovery would lead to evidence that would overcome the
presumption of regularity and good faith. The government distinguishes cases where
discovery was allowed due to a lack of any rationale for a contracting officer’s decision
in the administrative record, Impresa, 238 F.3d at 1338-40, and where there was clearer
evidence of bias. See Pitney Bowes Gov’t Sols., Inc. v. United States, 93 Fed. Cl. 327,
329 (2010); L-3 Commc’ns Integrated Sys., L.P. v. United States, 91 Fed. Cl. 347, 350
(2010), amended on reconsideration in part, 98 Fed. Cl. 45 (2011); see also Office Depot,
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Inc. v. United States, 94 Fed. Cl. 294, 297 (2010) (finding that allegations of bias did not
warrant deposition to supplement the administrative record).
The court agrees with the government. First, the affidavit and e-mails that KWR
offers to supplement the administrative record do not establish that the contracting officer
or any member of the evaluation team was inappropriately influenced by the discussion
of the wire-cutting incident that occurred in connection with a Castro Electric contract.
In this connection, the court notes that the contracting officer’s response to the e-mail
exchange, dated April 10, 2014, demonstrates a lack of bias toward Castro Electric. See
Pl.’s Fourth Mot. to Suppl. the Admin. R., Ex. 1-B at 3.
In addition, the court finds no reason to attribute the statements made by the
government’s counsel to the contracting officer or other agency staff involved in the
evaluation and selection process. Government counsel’s tone and language appears to
have been regrettably unprofessional, but there is no evidence that he was speaking for
the contracting officer or other agency officials involved in the selection process at issue
in this case. Indeed, there is no basis to assume that anyone involved in reviewing
KWR’s proposal on remand was aware of the attorneys’ conversation.
Finally, to the extent KWR argues that the agency’s IGE was not supported, this
argument goes to the merits of whether the agency’s decision was flawed and should be
overturned or remanded than to KWR’s allegations of bias in support of supplementation
and discovery. See D & S Consultants, Inc. v. United States, 101 Fed. Cl. 23, 33 (2011)
(finding that documentation in the record was “sufficient to permit the Court to
effectively review the creation and application of the IGE, which, plaintiff contend[ed],
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was based on irrational assumptions and critical miscalculations”); Moore’s Cafeteria
Servs. v. United States, 77 Fed. Cl. 180, 187-88 (2007) (finding that plaintiff did not
demonstrate prejudice in alleged errors in the IGE because the IGE was not the
contracting officer’s sole basis for making a price reasonableness determination).
III. Conclusion
KWR’s motion for discovery and motion to supplement the administrative record
are therefore DENIED. Pursuant to the court’s scheduling order (ECF No. 126) filed
September 4, 2015, the government shall file its response to plaintiff’s motion for
judgment on the administrative record and the government’s second cross-motion by
September 28, 2015. Plaintiff shall file its response and reply by October 8, 2015 and
the government shall file its reply by October 19, 2015.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Judge
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