The court ordered the government to show cause as to why it should not be sanctioned under Rule 11 for mishandling the protest record. The government responded to the order, but the court did not find the government’s arguments compelling. The court rejected the government’s premise—namely, that it could subjectively decide what is relevant to the protest. Rather, the court found that the government should include all documents related to the procurement decision, even if they were not expressly considered. Applying this standard, the court found the government unreasonably omitted a DCMA Report and a letter terminating the SSEB chair from the administrative record.
Background
The Army awarded a contract for training services to F3EA, Inc. An unsuccessful offeror, Oak Grove Technologies, protested with the Court of Federal Claims challenging the evaluation and alleging conflicts of interest. The court sustained the protest, finding the Army had erred in finding Oak Grove’s proposal unacceptable, and that the agency had not properly investigated alleged OCIs.
As part of the protest decision, the court also found that the government had omitted several documents from the administrative record, including (1) a DCMA report, which showed that another offeror ahead of Oak Grove was ineligible, and (2) a letter terminating the SSEB chair, which indicated that the chair had not fairly evaluated proposals. The court ordered the government to show cause as to why it should not be sanctioned for omitting these documents from the record.
Legal Analysis
- Bad Faith Not Required for Sanctions — In response to the show cause order, the government argued it should not be sanctioned because it had believed in good faith the record was complete, and there was no evidence of bad faith. The court reasoned that the Rule 11 standard for sanctions does not require bad faith, nor does it have an exception for good faith. The inquiry under Rule 11 is whether a party had an objectively reasonable litigation position at the time of filing a document.
- Agencies Can’t Subjectively Decide What’s Relevant — The court rejected the government’s general premise—i.e., that agencies are entitled to subjectively decide what is relevant to a protester’s claims. Rather, agencies must include all records related to the procurement decision. This includes not only documents relevant to the merits of the decision but also materials relevant to the process of making the decision. Critically, agencies should include documents that were before the agency at the time of the decision even if they were not specifically considered by the decision maker.
- Army Unreasonably Omitted DCMA Report from Record — The Army unreasonably omitted the DCMA Report from the record. The court opined that the omission was consistent with an attempt to shape the record in the agency’s favor. In the underlying protest, the government had argued that Oak Grove lacked standing because even if the awardee was ineligible, another offeror was next in line. The DCMA report, however, showed that the other offeror itself was likely ineligible. The government argued the Report was immaterial, but the court found that argument inconsistent with the findings in the Report and the purpose for which it was prepared.
- Army Improperly Omitted Letter Terminating the SSEB Chair — The government claimed it omitted a letter terminating the SSEB chair because it failed to recognize the potential relevance of the document. Indeed, the government alleged the letter was in fact helpful to the government, as it showed the chair had been terminated before a second evaluation and thus could not have favored F3EA. The court opined that this was “the kind of argument only a lawyer could love.” The record showed that the terminated SSEB chair still had some role or influence over the second evaluation. That role was a central issue to Oak Grove’s claims. The agency should have disclosed the termination letter.
- Government Must Pay Oak Grove’s Legal Costs — The government’s omissions from the record had delayed resolution of the case, wasted time and judicial resources, and forced the court to engage in fact finding on incomplete record. The court ordered the government to pay the expenses Oak Grove incurred in dealing with the administrative record issues.
