Protest challenging the award of a sole source bridge contract while the agency conducts corrective action is remanded so that the agency may identify additional facts to explain its extraordinary delay in conducting the corrective action. But a protest of the agency’s decision to take corrective action is denied under the doctrine of laches where the protester waited almost a year to file the protest.
Global Dynamics LLC brought suit in the Court of Federal Claims, challenging the conduct of the U.S. Army Medical Command in connection with a contract to provide nursing services. By the time it reached COFC, the procurement had a long, byzantine history, involving five earlier protests and three corrective actions over four years.
Global Dynamics’ complaint before COFC asserted that the agency’s conduct following the fifth protest was unreasonable. First, Global Dynamics claimed that the agency had wrongly canceled the solicitation following the fifth protest. Second, Global Dynamics argued MedCom’s decision to award a fifth sole source bridge contract to the incumbent, MedTrust LLC, during the pendency of the third corrective action, was improper.
Third, Global Dynamics challenged MedCom’s decision to even undertake the third corrective action. MedCom undertook the third corrective action following a protest (the fifth protest) filed before the Government Accountability Office by another offeror, which had challenged a previous award to Global Dynamics. GAO had sustained the protest. Global Dynamics contended that the GAO decision was irrational and thus MedCom’s decision to follow the GAO decision and take corrective action was also irrational.
All parties, including two intervenors—another offeror, GiaMed, and the incumbent, MedTrust—moved for judgment on the administrative record.
The court first addressed Count I of Global Dynamics’ complaint, which challenged MedCom’s decision to cancel the solicitation following the fifth protest. MedCom, however, had rescinded the cancellation after Global Dynamics had filed it complaint. Accordingly, the court found that Count I of the complaint was moot. Global Dynamics agreed, so the court dismissed the count.
The court next considered Count II, alleging that the fifth sole source bridge contract was unreasonable. The agency argued that it needed to award the sole source contract because following the decision to take corrective action, there was not enough time to conduct a new competition before the incumbent’s fourth sole source bridge contract expired. Global Dynamics countered that the time constraints were due to the agency’s failure to properly plan a transition.
The court tended to agree with the Global Dynamics, noting that it did not appear that the agency had timely conducted the corrective action. The court pointed out that the agency had 117 days to conduct the corrective action before awarding the fifth sole source contract. What’s more, four months after awarding the fifth sole source contract, the agency had still not completed the corrective action. The agency had no explanation for this delay. Without an explanation from the agency, the court found that it was unable to determine whether the fifth sole source contract had a rational basis. Accordingly, the court remanded the matter to the agency to identify any additional facts that would explain the basis for the “extraordinary and unexpected delays” in taking corrective action.
Finally, the court considered Count III of the complaint, which alleged that the agency’s decision following GAO’s recommendation in the fourth protest to take corrective action was unreasonable. The agency argued that Global Dynamics had waited nearly a year to challenge the corrective action and thus its claim was barred by the doctrine of laches.
Global Dynamics contended that laches was not an available defense, reasoning that a challenge to agency corrective action is treated like a pre-award protest. A protester must bring a pre-award protest before a new award decision or it waives the protest. Extrapolating from this, Global Dynamics argued that only the doctrine of waiver, not laches, applies to a pre-award protest. And, Global Dynamics concluded, because it had filed its protest before the agency had completed corrective action and made a new award, the protest was timely.
The court was not persuaded by Global Dynamics’s argument. The court noted that while laches is not a common defense in pre-award protests, in Mississippi Dept. of Rehabilitation Services v. United States, 61 Fed. Cl. 20 (2004), the COFC had considered the doctrine in the context of a pre-award protest. While the court in that case had ultimately found laches did not apply under the facts, it had raised no question as whether the defense was or should be limited to only post-award protests. Thus, the court in the present case found that laches could be asserted in a pre-award protest.
Having found that laches could be asserted in a pre-award protest, the court applied the doctrine to the facts. Laches has two elements: (1) unexcused delay by the claimant, and (2) prejudice to the other party. The court found that Global Dynamics’ almost one year delay in protesting the corrective action was unexplained and unexcused. Given the long, involved history of the case, the court reasoned, Global Dynamics should have been positioned to object with all deliberate speed to the agency’s corrective action. In fact, Global Dynamics admitted in its complaint that it initially decided not to protest the corrective action, but then changed its mind a year later.
The court further found that the agency had been prejudiced by Global Dynamics’ delay. If Global Dynamics had protested the corrective action earlier, the agency would not have taken steps—i.e., establishing a new evaluation panel and re-evaluating proposals—to implement GAO’s recommendation. The court concluded that Count III of Global Dynamics’ complaint was barred by the doctrine of laches.
The court dismissed Count I of the complaint, remanded Count II, and granted the agency and the intervenors judgment on the administrative record as to Count III.
Global Dynamics is represented by Craig A. Holman, Michael E. Samuels, and Alexandra L. Barbee-Garret of Arnold and Porter Kaye Scholer. The government is represented by Tanya B. Koenig, Chad A. Readler, Robert E. Kirschman, Jr., and Patricia M. McCarthy of the U.S. Department of Justice. The government is also represented by Jessica E. Hom and Evan C. Williams of the U.S. Army Legal Services Agency as well as John T. Harryman and Eugene J. Smith of the U.S. Army Medical Command. GiaMed and MedTrust LLC are represented by Jacqueline K. Unger.
