GAO Protest Decision Does Not Trigger Collateral Estoppel for Claim; ASBCA No. 61320, Appeal of Chugach Federal Solutions Inc.

The government’s motion for partial summary judgment on a claim asserting it withheld superior knowledge of the estimated amount of work required for contract performance is denied, where the appellant’s participation as an intervenor in a protest challenging its award did not preclude it from pursuing its superior knowledge theory of recovery. The agency argued the appellant had asserted in the protest that the independent government estimate of the workload was inaccurate and therefore it could not change its litigating position to argue that the agency withheld this allegedly inaccurate estimate to its detriment.

However, the board held that the protest did not turn on the accuracy of the IGE and that the agency had never asserted the IGE was unreliable, and therefore the appellant had not presented arguments that conflicted with its litigating position at GAO. The board also held that a decision in a tangentially related GAO protest did not constitute a decision that triggered collateral estoppel. Finally, because the appellant was only the intervenor in that protest, it could not have previously asserted a claim, nor waived its ability to assert the claim.

Chugach Federal Solutions Inc. and the government filed cross motions for partial summary judgment on Chugach’s claim alleging that the government withheld superior knowledge regarding the level of effort required to perform its contract and how the work differed from the prior contract.

Chugach’s claim arose from a protest challenging the agency’s decision to award it an IDIQ contract for base operations support services, which came under protest by an unsuccessful offeror. Chugach intervened in that protest and worked with the Navy to prepare the agency report. As part of this coordination, Chugach had access to Navy source selection documents and Chugach’s counsel, in turn, provided the Navy access to a secure document exchange system to facilitate the Navy’s sharing of documents with CFSI.

The protest involved the agency’s evaluation of offerors’ proposed staffing. The Navy first compared the offerors’ proposed staffing levels to the IGE and then additionally evaluated the staffing levels using a statistical analysis calculating the mean and standard deviation of the offers, excluding the IGE, and reviewed the offerors’ technical approaches. The agency explained that, rather than relying entirely on an inaccurate and undisclosed estimate, it employed a statistical analysis that would identify any elements of an offeror’ s proposal that significantly deviated from that of the other offerors and then evaluated whether anything in that offeror’s proposal supported such a deviation. The Navy asserted the IGE was simply a “starting point” for its reasonable evaluation.

After GAO denied the protests, Chugach submitted a certified claim to the Navy for $36,043,945, alleging that the government withheld superior knowledge regarding the level of effort required to perform the contract and how the work differed from the prior base operations support contract. The CO denied the claim and this appeal followed.

The Navy moved for partial summary judgment, arguing that Chugach’s actions constitute judicial estoppel. According to the Navy, Chugach’s current position—that the Navy possessed superior knowledge that was reflected in the IGE—is inconsistent with positions asserted in the GAO protest, in which Chugach intervened and participated in the preparation of responses. The Navy argued that Chugach had presented the IGE as “inaccurate” during the GAO protest, and therefore could not now point to the IGE as evidence of the Navy’s superior knowledge to support its claim.

In response, Chugach maintained that its statements of general support in favor of the Navy’s position do not constitute a litigating positing before GAO, and the statements were not inconsistent with its current position. Chugach noted GAO did not adopt its contentions and that the Navy has not established that Chugach would gain an unfair advantage in its appeal. The Navy argued that statements in the agency report can be attributed to Chugach because Chugach assisted in drafting the report and endorsed the agency report to the GAO.

First, even assuming that Chugach’s endorsement of the Navy’s position constitutes Chugach making the same arguments to the GAO, the board held that Chugach did not assert “clearly inconsistent” positions before the GAO and before the board.

First, the board noted that the agency report did not characterize the IGE as inaccurate. The board found that some of the documents the agency used to make this argument were not quoted in the agency report nor cited by GAO. Further, the Navy cited to source selection documents that were prepared before award of the contract, and thus, before the post-award protest and without Chugach’s involvement. Thus, the board held these documents did not constitute statements to a tribunal.

The board therefore limited its analysis to statements actually presented to GAO in the agency report. Contrary to the Navy’s arguments, the statements actually contained in the agency report did not state that the IGE is inaccurate. Rather, the agency report explained how the Navy evaluated staffing and used “inaccurate and undisclosed” only in reference to an evaluation challenged in a prior GAO protest. Read as a whole, the board held that the agency report did not argue that the IGE is inaccurate, but rather that it was but one element of a more thorough analysis.

Put more simply, the dispute before the GAO was process-based, and did not address the quality of the data. Thus, the board held that Chugach had not asserted directly inconsistent positions before GAO and the board. Therefore, the board held there was no risk that either GAO or the board were misled and that there was no need to invoke judicial estoppel.

In its cross-motion, Chugach stated that its superior knowledge claim did not turn on whether the Navy’s IGE was accurate. Rather, it turned on whether the Navy improperly withheld the underlying information that it used to develop that estimate. The Navy argued that Chugach’s statement was an admission that the IGE does not constitute superior knowledge. The Navy asserted that its motion was limited to Chugach’s allegation that the IGE itself, and not the underlying data, constituted superior knowledge.

However, the board found this argument inconsistent with the Navy’s motion, which challenged Chugach’s claim on the grounds that its argument of superior knowledge was undercut by its representation to GAO that the IGE was unreliable. The board Chugach’s position to be that the Navy knew that it would cost the awardee more to perform this contract than it cost the incumbent contractor to perform the previous contract and that this superior knowledge was used by the Navy to prepare the IGE.

In its cross-motion, Chugach argued the Navy cannot establish the affirmative defense of estoppel, and the board agreed. With regard to collateral estoppel, Chugach noted that the required elements for that affirmative defense include a valid final decision on the merits. Chugach argued that a decision in an unrelated GAO protest did not constitute such a decision, and the board agreed, because the GAO issues only non-final advisory opinions in bid protest actions.

Further, Chugach noted the Navy’s inability, in discovery responses, to identify reliance or prejudice. In an interrogatory, Chugach asked the Navy to identify all statements, actions, or omissions that the Navy contends support its affirmative defense of estoppel. In response, the Navy stated that when Chugach submitted its comments to GAO, the Navy had no reason to believe that Chugach was being anything other than accurate. The Navy stated it might be impossible to ever state definitively what actions or inactions the Navy may have taken or not taken had it believed that CFSI’s protest position was not being accurately stated.

The government did not request time to take discovery but simply asserts that the board should deny Chugach’s motion because the government might be able to develop facts in the future to oppose the motion. The board found this argument insufficient. The board explained that the non-moving party cannot request deferral of a ruling on a summary judgment motion simply by noting that discovery is not complete, but must explain specifically how additional discovery will allow the party to rebut the summary judgment motion.

The board also held that Chugach’s joint filing asking GAO to partially dismiss the protest did not constitute waiver, as there was no discussion of staffing levels or other issues relevant to this appeal. Further, as the intervenor, Chugach could not have asserted any-cross-or counter-claims against the Navy. Because Chugach could not have previously asserted a claim, it could not have waived its ability to assert the claim through a filing at GAO.

Chugach Federal Solutions Inc. is represented by Richard B. O’Keeffe, Jr., Gary S. Ward, Cara L. Lasley, Lindy C. Bathurst, and William A. Roberts III, of Wiley Rein LLP. The government is represented by Craig D. Jensen, Navy Chief Trial Attorney, and by David M. Marquez and Anthony Hicks, Trial Attorneys.