Draken International, Inc. v. United States

In the United States Court of Federal Claims

No. 14-1005C

(Bid Protest)

(Filed: February 13, 2015) 1

*************************

* Pre-award Bid Protest; 28 U.S.C.

DRAKEN INTERNATIONAL, INC., * § 1491(b)(1); Competition in Contracting

* Act; 41 U.S.C. § 3306(a); Solicitation

Plaintiff, * Terms Coupled With Procurement Delay

* Did Not Unduly Restrict Competition;

v. * Ripeness.

*

THE UNITED STATES, *

*

Defendant, *

*

and *

*

AIRBORNE TACTICAL ADVANTAGE *

CO., LLC, *

*

Intervenor. *

*

*************************

Alan Pemberton, Saurabh Anand, and Christine Minarich, Covington and Burling, LLP

1201 Pennsylvania Ave, NW, Washington, D.C. 20004, for Plaintiff.

Joyce R. Branda, Robert E. Kirshman, Jr., Bryant G. Snee, and Joseph E. Ashman, U.S.

Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box 480, Ben

Franklin Station, Washington, D.C. 20044, for Defendant.

Robert K. Tompkins, Holland & Knight, 800 17th Street, NW, Suite 1100, Washington,

D.C. 20006, for Intervenor. Elizabeth M. Gill and Elizabeth N. Jochum, Holland & Knight, 800

17th Street, NW, Suite 1100, Washington, D.C. 20006, Of Counsel. Richard B. Benenson,

Brownstein Hyatt Farber Schreck, LLP, 410 Seventeenth Street, Suite 2200, Denver, CO 80202,

Of Counsel.

1

The Court issued this opinion under seal on January 31, 2015, and directed the parties to

file proposed redactions by February 13, 2015. The Court publishes this Opinion indicating

redactions by asterisks “[***].”

_________________________________________________________

OPINION AND ORDER

_________________________________________________________

WILLIAMS, Judge.

This pre-award bid protest comes before the Court on the parties’ cross-motions for

judgment on the Administrative Record (“AR”). Plaintiff, Draken International, Inc. (“Draken”),

challenges the procurement process implemented by the Department of the Navy’s Naval Air

Systems Command (“NAVAIR”) under solicitation number N00019-12-R-1001. Plaintiff argues

that NAVAIR violated the Competition in Contracting Act (“CICA”) and the Federal

Acquisition Regulation (“FAR”)2 because its delay in conducting the procurement coupled with

the solicitation’s requirement that the awardee provide both subsonic (“Type III”) and supersonic

(“Type IV”) aircraft unduly restricts competition. Plaintiff asserts that this solicitation process

will result in a de facto sole-source award to Airborne Tactical Advantage Co., LLC (“ATAC”),

the incumbent. Because ATAC is currently being paid by the Government to maintain its fleet,

Plaintiff submits that ATAC can avoid the prohibitive cost foisted upon other offerors of meeting

operational readiness requirements during a prolonged procurement process. Plaintiff also

protests the duration of a sole-source bridge contract awarded to ATAC, which could potentially

last until July 2015, given the option periods. Finally, Plaintiff contends that it was treated

unequally compared to [***] other offerors that were allowed to provide new airworthiness data

after the deadline for submission of initial offers, while it was not given this opportunity.

Plaintiff seeks a declaratory judgment that NAVAIR violated CICA and the FAR by

unduly restricting competition in its conduct of this procurement. Plaintiff also asks the Court to

order NAVAIR to limit the term of ATAC’s sole-source bridge contract to coincide with a final

award date and to amend the solicitation to separately procure subsonic and supersonic aircraft

services. Alternatively, Plaintiff asks the Court to limit an award under the current solicitation to

the base year and issue a new solicitation for subsequent years or allow all offerors the

opportunity to offer new aircraft in the event their originally proposed aircraft are no longer

available.

Defendant argues that Draken’s challenge to the solicitation’s terms combining

procurement of supersonic and subsonic aircraft is untimely, that the delay in the procurement

process resulted from multiple protests, and that the solicitation’s terms are reasonable and

necessary to meet NAVAIR’s requirements. Defendant asserts that Draken was not treated any

2

Plaintiff argues that Defendant violated “FAR Part 6” and FAR 15.305. See Pl. Mot. for

Judgment on the AR at i, 24. Plaintiff does not specify a specific provision within FAR Part 6,

but FAR Part 6 generally “prescribes policies and procedures to promote full and open

competition in the acquisition process.” 48 C.F.R. § 6.000 (2012). Plaintiff does not further

explain how it believes the Government violated FAR 15.305, which discusses factors for

proposal evaluation and requires that “an agency shall evaluate competitive proposals and then

assess their relative qualities solely on the factors and subfactors specified in the solicitation.”

48 C.F.R. § 15.305.

2

differently than other offerors, as Draken was also given a chance to amend its proposal. ATAC

argues that Draken does not have standing to bring the instant protest because it no longer

qualifies for award, that no improper bundling of requirements has occurred, and that Draken’s

allegations of unfair treatment are not ripe.

For the reasons that follow, the Court finds that Plaintiff has standing, its protest is

timely, the Agency’s delayed procurement process did not violate CICA, and Draken’s challenge

to unequal treatment is unripe.

Findings of Fact3

The Contracted Air Services Program and Issuance of Solicitation N00019-12-R-1001

The United States Department of the Navy’s Contracted Air Services (“CAS”) program

“provides Contractor owned and operated aircraft, personnel, equipment and support for Fleet

training and exercises to a variety of customers to include: United States Navy (USN), Foreign

Military Sales, and other Department of Defense (DoD) agencies and DoD contractors.” AR

223. Contractors working under the CAS program provide aircraft and related services for

“airborne threat simulation” and training exercises for the benefit of “shipboard and aircraft

squadron weapon systems operators and aircrew . . . .” Id. In May 2009, ATAC was awarded a

firm fixed price/indefinite-delivery indefinite-quantity contract for the provision of both subsonic

Type III and supersonic Type IV aircraft, which fly at higher speeds and are more expensive and

difficult to obtain, to support the CAS program. Id. at 35-36, 225, 3407. This contract ended on

July 28, 2014, and NAVAIR has been obtaining these services via ATAC’s sole-source bridge

contract since then. Id. At 3407.

On June 21, 2013, Sean Stackley, the Assistant Secretary of the Navy (Research,

Development and Acquisition) wrote a “Determination and Findings For Authority to Award a

Single Source Task Order Contract” for the solicitation at issue. Id. at 4469. This document was

created because the Department of Defense may not award task and delivery order contracts

exceeding $103 million, inclusive of options, to a single source, “unless the head of the agency

determines in writing that the task or delivery orders expected under the contract are so integrally

related that only a single source can reasonably perform the work.” Id. According to Assistant

Secretary Stackley, a single-source indefinite-delivery/indefinite-quantity contract permitted “the

greatest flexibility in both quantities and schedule to meet the needs of the Fleet in providing

combat readiness training.” Id. Furthermore, making a single contractor “the integrator across

all locations” avoided the Government either having to take on this integrator role itself or

expend additional resources that were not budgeted. Id. at 4470.

Assistant Secretary Stackley articulated reasons why Type III and Type IV aircraft were

included in the same solicitation, stating:

3

These findings of fact are derived from the AR. Additional findings of fact are in the

Discussion.

3

The simultaneous presentation requirement for high subsonic and supersonic

aircraft was developed based on the current contract practice of authorizing the

contractor to fulfill high subsonic missions with supersonic aircraft, which are

billed at the lower high subsonic contract rate. This augmentation of high

subsonic aircraft allows the Government to minimize the required quantity of high

subsonic aircraft without compromising the ability to cover surge requirements.

With a multiple award contract, the ability to augment high subsonic aircraft for

surge requirements is lost, and the Government would be required to increase the

required number of high subsonic aircraft to maintain the same level of contractor

coverage. The ability to augment high subsonic aircraft saves the [United States

Navy] and [the Department of Defense] money because it results in a higher

utilization of supersonic aircraft and avoids the payment of fixed aircraft costs for

additional high subsonic aircraft. Due to fiscal constraints, which are expected to

become more severe, the [United States Navy] and [the Department of Defense]

do not have the funds to cover the cost of additional high subsonic aircraft;

therefore, award of a multiple award contract would result in a degraded level of

training because fewer aircraft would be available for scheduling.

Additionally, this scenario would lead to inefficiencies and increase contractor

costs to the point of making the desired level of training unaffordable. A single

source provider gains efficiencies due to commonality of resources provided for

each aircraft platform at each site. Aircraft platforms at each site require

mechanics, parts, and tooling, as well as Quality Assurance, training, certification

and technical publication support functions. These can all be achieved across both

the high subsonic and supersonic aircraft using shared manpower, common

spaces, and a large amount of common parts and tooling.

Two contractors performing at a single location, each providing the training

services on separate types of aircraft, would require additional space, parts,

tooling and personnel resources to maintain the same level of service as a single

source provider. This would directly increase the contract costs of the training.

The [United States Navy] and [the Department of Defense] do not have the funds

to cover increased training costs; therefore less training flight time would be

ordered – resulting in a degraded state of operational readiness.

For the reasons stated above, the task orders expected to be issued under this

contract are so integrally related that only a single source can reasonably perform

this effort, and awarding task orders to different contractors based upon the type

of aircraft would not be feasible.

Id. at 4470-71. Assistant Secretary Stackely concluded, “[i]f a single source task order contract

award is not approved, the Government would lose the advantage of efficiencies and economies

of a single contractor operating all aircraft across all geographic areas, would risk aircraft

availability for surge requirements, and would incur duplication of costs associated with

providing and maintaining multiple fleets of aircraft.” Id. at 4473.

4

On July 25, 2013, NAVAIR issued the solicitation. The performance period was to be up

to five years, comprised of a base year and four one-year options. Id. at 258, 514. This

solicitation sought at least 14 Type III aircraft and five Type IV aircraft and related services. Id.

at 721, 723. The original due date for offers was September 24, 2013, and the contract was to

commence upon award with a 60-day “phase-in period,” during which the contractor was

required to become operationally ready. Id. at 495, 514. Operational readiness included

securing an East Coast permanent basing site and “positioning required aircraft and support

infrastructure to other permanent basing sites.” Id. at 998.

Section L, Volume 2.1, set forth the technical pre-requisites, requiring a copy of the FAA

Airworthiness Certificate for each aircraft, identifying the aircraft by tail number, and identifying

each aircraft as “primary” or “backup.” Id. at 569. Volume 2.3 required offerors to provide

detailed aircraft airworthiness data. This data was to include tracking and planning for

replacement of parts, an inspection plan, modifications to each aircraft after it was retired from

military use, “an accounting for the timeframe from manufacture to proposal submittal date” and

a description of each aircraft’s maintenance history. Id. at 572-73.

The “anticipated award date” was stated to be March 1, 2014, and the solicitation

indicated that “[t]his information is provided for use as a basis for schedules and burden (labor,

overheads, G&A, etc.) mid-point calculations.” Id. at 586. Additionally, the performance

periods were described as “estimates only.” Id. at 515. The award would be made on a “best

value” basis in consideration of the technical, past performance, and cost factors, in that order of

importance. Id. at 589.

Amendments to the Solicitation and Air USA, Inc.’s Protests

The solicitation was amended 10 times. The amendment relevant to the instant case is

Amendment 6, issued on October 11, 2013, which created two phases to the technical evaluation.

Id. at 848, 866-67. In Phase I, the Government would create a single technical rating for each

proposal based on the required technical elements, including the provision of airworthiness data.

In Phase II, offerors were required to provide FAA Airworthiness Certificates for each aircraft

“no later than three (3) business days following the Government’s request for Final Proposal

Revisions (FPRs), “anticipated to be on or about 3 July 2014.” Id. at 1059. Amendment 5

changed the due date for proposals to November 12, 2013 and the anticipated award date was

extended to April 1, 2014, in Amendment 6. Id. at 847, 882. Amendment 6 also removed the

requirement that offerors provide FAA Airworthiness Certificates at the time of proposal

submission.

Amendment 6 was spurred by the September 24, 2013 agency protest of Air USA, Inc.

(“Air USA”). Id. at 2737, 2759. In its protest, Air USA argued that requiring offerors to submit

an FAA Airworthiness Certificate and tail numbers as a prerequisite to award restricted

competition because only the incumbent would be able to provide this information at the time of

proposal submission. Id. at 2744-45. Specifically, Air USA contended:

[T]he Agency is not only demanding that the aircraft have FAA Airworthiness

Certificates and all tail numbers be assigned at least six (6) months before

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contract award and an additional sixty (60) days before mission readiness, the

Agency is asking the bidders to make an investment of approximately tens of

millions of dollars in aircraft to sit on the tarmac and provide all maintenance and

indirect costs to protect their investment with no return on investment. In that

regard and upon information and belief, the incumbent is the only bidder that can

meet that requirement.

Id. at 2746.

After Amendment 6 was issued, on October 23, 2013, Air USA filed a supplement to its

first agency protest. In this supplement, Air USA argued that an FAA Airworthiness Certificate

could not be obtained without the aircraft and maintenance records, so changing the date of

submission of the FAA Airworthiness Certificates but still requiring airworthiness data at the

time of proposal submission negated Amendment 6. Id. at 2761. Air USA referenced a

Question and Answer, regarding the timing of submitting airworthiness data and asked if the

requirements of Technical Element #2, the airworthiness data, could be submitted at the same

time as the FAA Airworthiness Certificates. Id. The Agency responded no, stating:

Airworthiness Data is a critical component of the CAS Fighter Jet Source

Selection. This technical evaluation factor represents fundamental aspects of

airworthiness and will be used to determine an [offeror’s] airworthiness risk

assessment while flying under Public Use Status. As a result, this information

must be received during the evaluation phase of the source selection in order to

evaluate, assess and make a determination, which is different than receiving the

FAA certification which only requires validation. Therefore no conflict exists in

the solicitation and no revision will be made.

Id. at 2762. On November 5, 2013, the Agency rejected Air USA’s protest, reaffirming that

airworthiness data was “necessary for proposal evaluation” and “needed at time of proposal

submission.” Id. at 2765.

On November 7, 2013, Air USA filed a Government Accountability Office (“GAO”)

protest raising the same ground as its agency protest. Id. at 2767. Air USA requested that the

award date be stayed in its GAO protest. Id. at 2769. On February 14, 2014, the GAO denied

Air USA’s protest, finding that the Agency had “reasonably established a legitimate need for

airworthiness data documentation at the time of proposal submission,” and that “[g]iven the

critical need to ensure the safety of government and civilian personnel . . . the agency’s interest

in evaluating each aircraft’s airworthiness data through a thorough assessment of the

documentation provided at the time of proposal submission is reasonable to achieve the highest

level of reliability and effectiveness.” Id. at 3243.

Proposal Evaluation Results, Evaluation Notices, and Discussions

[***] companies submitted proposals in response to the solicitation – [***], ATAC,

Draken, and [***] -- and were evaluated under the factors of technical, past performance, and

total evaluated price. Id. at 3256. On June 18, 2014, [***] were given an [***] rating for the

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technical factor, with [***] and [***] being found a [***] in this category and Draken and

ATAC being found a [***]. Id. In the past performance category, [***] had a [***] rating, both

ATAC and [***] were [***] and Draken was given a [***] rating. Id. Draken’s price was the

[***] of the [***] bidders. Id. All were found to be [***] with the RFP and all were deemed

[***] of receiving the award. Id. In determining [***] rating and risk for the technical factor,

the evaluators noted as one [***] that [***] had not provided any [***]. Id. at 3263. Draken’s

[***] included [***]. Id. at 3277. Draken received scores of [***] [***] [***] [***]. Id. at

3280. The April 1, 2014 award date passed without an award being made, and award is now

anticipated in February 2015.4 The Procuring Contracting Officer testified that the anticipated

award date has been pushed back several times due to ongoing discussions with the offerors, the

need for additional time to evaluate proposal revisions, and Draken’s instant bid protests.

On June 20, 2014, the Agency determined that all offerors were within the competitive

range and that discussions pursuant to FAR 15.306(d) were necessary due to [***]. . . .” Id. at

3371. At the beginning of July 2014, NAVAIR sent out 107 evaluation notices (“ENs”) to the

offerors so that they could provide further information “to assist the Government in its final

evaluation of the proposals.” Id. at 3416.5 These ENs addressed various deficiencies in each

offeror’s proposal. One EN allowed [***] to provide the missing airworthiness data required by

Technical Element # 2, but the record does not indicate whether [***] provided this data. Id. at

3439. Offerors were originally instructed to respond to the ENs by July 24, 2014, but this date

was extended to August 4, 2014, at the request of offerors. Id. at 4467.

On July 24, 2014, [***] sent a letter to NAVAIR regarding EN responses, indicating that

it was redirecting [***]. Id. at 3801-02. The record does not indicate what the Government’s

response to [***] letter was.

ATAC Bridge Contract

While the EN process was ongoing, on July 11, 2014, the Navy issued a Justification and

Approval For Use of Other Than Full and Open Competition (“Justification”) to award ATAC a

sole-source bridge contract commencing on July 29, 2014, with a three-month base period and

three additional three-month option periods, permitting the sole-source contract to last until July

2015. Id. at 3373, 3407. The Justification stated that the sole-source contract was necessary to

prevent a gap in training services between the end of ATAC’s incumbent contract on July 28,

2014, and the “follow on competitive contract.” Id. at 3407. Furthermore, according to the

4

On November 28, 2014, the Government filed a motion to amend the Administrative

Record to add a November 26, 2014 Declaration of Phillip Smith, the Procuring Contracting

Officer. Plaintiff did not oppose this motion. As this testimony directly relates to the alleged

excessive timeframe of the procurement at issue, this motion is granted. See Axiom Res. Mgmt.

v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2009).

5

Although the AR only contains ENs sent to [***] and [***], and the proposals of these

two companies in response to the ENs, the record reflects that [***] offerors received ENs and

were given an opportunity to respond. The Agency created a “CAS Fighter Jets EN Matrix” that

catalogues each EN, each offeror’s response, and the status of resolution. Id. at 3410. Draken’s

EN responses are also referenced in the Agency’s denial of its protest. Id. at 4467.

7

Justification, ATAC had personnel on site and could continue performance and avoid a “gap in

contractual support” that “would ultimately lead to an unacceptable decrease in mission

readiness by precluding the pilots and ships the opportunity to train in simulated scenarios.” Id.

at 3408.

Draken’s Agency Protest

On July 24, 2014, Draken filed a protest with NAVAIR arguing that the short operational

readiness requirement forced all offerors except the incumbent to possess and maintain aircraft at

their own expense while the Agency made its selection decision, and the requirement that

offerors provide both Type III and Type IV aircraft “became improperly restrictive when

combined with the extraordinary procurement delays that the Agency has imposed on this

process.” Id. at 4438. Draken acknowledged that while these requirements “posed some barriers

to competition” when the solicitation was issued, “these limitations arguably were reasonably

necessary to meet the Agency’s needs and provided the agency a reasonable period of time to

review offerors’ proposals.” Id. at 4439. However, according to Draken, “as the delays and

uncertainty in the selection process have mounted, these limitations have made the selection

process defective and anticompetitive, and have proven to be unnecessary in light of the

Agency’s needs.” Id. In this protest, Draken noted [***]. During an August 5, 2014

teleconference with the Agency regarding its agency protest, Draken confirmed that it would no

longer be able to meet the Type IV requirement. Id. at 4467.

On September 5, 2014, NAVAIR denied Draken’s protest. The Agency found that any

protest of the inclusion of both Type III and Type IV aircraft was required to be submitted prior

to the closing date for initial receipt of proposals. Id. at 4486. The Agency rejected Draken’s

argument that the length of the evaluation process could make a requirement that was not

restrictive at the time of proposal submission unduly restrictive at a later time.

Discussion

Standing

As a preliminary matter, ATAC challenges Draken’s standing. 6 Draken “‘bears the

burden of establishing [the] elements [of standing]’” because it invokes this Court’s jurisdiction.

Myers Investigative & Sec. Servs. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002)

(alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). To

have standing in a bid protest, a protestor must be an “interested party.” Orion Tech., Inc. v.

United States, 704 F.3d 1344, 1348 (Fed. Cir. 2013) (citing Rex Serv. Corp. v. United States,

448 F.3d 1305, 1307 (Fed. Cir. 2006)). To be an “interested party,” a protestor must show: (1)

that it is an “actual or prospective bidder” (2) “whose direct economic interest would be affected

by the award of the contract.” Digitalis Educ. Solutions, Inc. v. United States, 664 F.3d 1380,

1384 (Fed. Cir. 2012) (citing Rex, 448 F.3d at 1307). As the term denotes, an actual bidder is

one who submitted a bid for the challenged procurement. Rex, 448 F.3d at 1307.

6

While the Government argues that Draken’s protest of the solicitation terms is untimely,

it does not challenge Draken’s standing to protest.

8

“Generally, to prove the existence of a direct economic interest, a party must show that it

had a ‘substantial chance’ of winning the contract.” Orion, 704 F.3d at 1348 (citing Rex, 448

F.3d at 1308). There is, however, “[a]n exception to that standard [] when a prospective bidder

challenges the terms of the solicitation itself, prior to actually submitting a bid.” Id. (citing

Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1361 (Fed. Cir. 2009)). In the pre-bid

context, the protestor can establish a direct economic interest “by demonstrating that it suffered a

‘non-trivial competitive injury which can be redressed by judicial relief.’” Id. (quoting Weeks

Marine, 575 F.3d at 1361-62). However, where bids have been submitted but an award has not

been made, the correct test of economic interest is the “substantial chance” test used in the post-

award context, not the “non-trivial competitive injury” test. Id.

ATAC contends that Draken lacks standing because it has unresolved ENs and can no

longer meet the Type IV aircraft requirement and thus “currently does not have a substantial

chance of receiving the contract, but for the alleged error.” Intervenor Mot. for Judgment on the

AR 20. To satisfy the substantial chance test, a protester “must demonstrate more than a ‘mere

possibility that [it] would have received the contract but for the [alleged] error [in the

procurement process].’” CliniComp Int’l v. United States, 117 Fed. Cl. 722, 734 (2014)

(alternations in original) (internal citations omitted) (quoting Asia Pac. Airlines v. United States,

68 Fed. Cl. 8, 18 (2005). However, “‘a protester is not required to show that but for the alleged

error, [it] would have been awarded the contract.’” Id. (alteration in original) (quoting Data Gen.

Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir. 1996)).

As ATAC acknowledges, “[t]he question whether a protester ‘ha[s] a substantial chance

of securing the award,’ turns on whether the protester would have had a substantial chance if not

for the alleged errors.” Comint Sys. Corp. v. United States, 700 F.3d 1377, 1383 (Fed. Cir.

2012) (emphasis added) (quoting Myers Investigative & Sec. Servs., Inc. v. United States, 275

F.3d 1366, 1370 (Fed. Cir. 2002)). The error alleged by Draken in this protest is that the

Agency’s delay in conducting the procurement, coupled with its operational readiness

requirements for both Type III and Type IV aircraft, makes the solicitation anti-competitive. If

these alleged errors had not occurred, i.e. the Agency had met its original anticipated award date

and not delayed the procurement process, Draken could have – as it did – submitted its offer and

met the solicitation terms, expensive though they were. Only after the Agency extended the

anticipated award date by almost a year did the requirements for Type IV aircraft become

financially prohibitive.7 As Draken submitted the [***] bid and [***] ATAC in the technical

risk category, Draken had a “substantial chance” of being awarded the contract, but for the

alleged defect in the procurement process – unduly restrictive solicitation terms and prolonged

delay. The fact that Draken has allegedly unresolved ENs does not alter this conclusion as the

EN process has not been concluded.

7

The requirement to supply both Type III and Type IV aircraft became impossible for

Draken to meet once, after delay, it lost its surprise subcontractor. Dec. 8, 2014 Oral Arg. Tr. at

23:3-7 (describing how Draken was able to originally submit a proposal due to finding a

“surprise” subcontractor, who has been “unable to stick with it throughout these extensive

delays”).

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Standard of Review for Bid Protests

The Court evaluates bid protests pursuant to the Administrative Procedure Act’s standard

of review for an agency action. Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir.

2005) (citing Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,

1332 (Fed. Cir. 2001)). This Court will not disturb an agency’s procurement decision unless the

Court finds that it was “arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A) (2012); Adams & Assocs. v. United States, 741

F.3d 102, 105-06 (Fed. Cir. 2014). Under Rule 52.1, the parties are limited to the AR, and the

Court makes findings of fact as if it were conducting a trial on a paper record. See Bannum, 404

F.3d at 1356.8 Looking to the AR, the Court must determine whether a party has met its burden

of proof based on the evidence in the record. Id.

Plaintiff Failed to Establish that the Agency’s Delay Caused the Solicitation Requirements

to Become Unduly Restrictive in Violation of CICA

Plaintiff contends that the Agency violated CICA citing “two primary defects” in the

solicitation -- the combination of Type III and Type IV services and the 60-day operational

readiness requirement -- which, “in combination with Agency delays, unduly restrict

competition.” Pl. Mot. for Judgment on the AR 25. Draken acknowledges that “[w]hile the

[s]olicitation requirements initially appeared difficult but reasonable” based on the Agency’s

“promised” award timeline, “they are no longer reasonable now that the Agency has decided to

extend the timeframe for making an award by up to five times its original estimate.” Id. at 15

(emphasis in original). Thus, in Plaintiff’s view, while the solicitation did not contain anti-

competitive terms at the time of proposal submission, the subsequent delay in the procurement

process rendered these terms anti-competitive.

Plaintiff’s Challenge to the Solicitation Terms is Untimely

To the extent that Plaintiff argues that the solicitation’s requirements for operational

readiness and both Type III and Type IV aircraft unduly restrict competition, such an argument is

untimely. As the Federal Circuit held in Blue & Gold Fleet, L.P. v. United States, “a party who

has the opportunity to object to the terms of a government solicitation containing a patent error

and fails to do so prior to the close of the bidding process waives its ability to raise the same

objection subsequently in a bid protest action in the Court of Federal Claims.” 492 F.3d 1308,

1313 (Fed. Cir. 2007). “[W]here there is a ‘deficiency or problem in a solicitation . . . the proper

procedure for the offeror to follow is not to wait to see if it is the successful offeror before

deciding whether to challenge the procurement, but rather to raise the objection in a timely

fashion.’” Id. at 1314 (alteration in original) (citing N.C. Div. of Servs. for the Blind v. United

States, 53 Fed. Cl. 147, 165 (2002); see also Argencord Mach. & Equip., Inc. v. United States,

68 Fed. Cl. 167, 175 n.14 (2005); MVM, Inc. v. United States, 46 Fed. Cl. 126, 130 (2000);

8

ATAC relies upon documents that are not part of the AR. Pursuant to Rule 52.1, the

Court has not considered these documents. See Intervenor Br. 6 n. 1-2, 7 n. 3, 8 n. 4-5, 9 n. 6-8,

10 n. 9, 31 n. 18-19.

10

Allied Tech. Group, Inc. v. United States, 39 Fed. Cl. 125, 146 (1997); Aerolease Long Beach v.

United States, 31 Fed. Cl. 342, 358 (1994)).

Plaintiff’s Claim of Undue Procurement Delay is Timely and Reviewable

While Blue & Gold prevents Plaintiff from challenging solicitation terms, it does not

prevent Draken from protesting alleged pre-award deficiencies in the procurement process. The

delay that Draken argues has made the procurement process anti-competitive was not a term of

the solicitation. There was no basis on the face of the solicitation for Plaintiff to challenge what

later became, in its view, an unduly lengthy procurement process. The solicitation stated that the

“anticipated” award date was March 1, 2014, information that was to be used by bidders as “a

basis for schedules and burden (labor, overheads, G&A, etc.) mid-point calculations.” AR 586.

Plaintiff does not contend that this solicitation term was defective, only that the Agency’s

subsequent departure from that anticipated date rendered the procurement anti-competitive. As

Draken is not challenging a solicitation term, but instead the combination of delay in the

procurement process with requirements that allegedly became unduly restrictive due to this

delay, Draken’s protest is timely under Blue & Gold.

Plaintiff Has Not Established a Violation of CICA

The plaintiff in a bid protest bears the burden of proving that a “clear and prejudicial”

error marred the procurement in question. CACI Field Servs., Inc. v. United States, 854 F.2d

464, 466 (Fed. Cir. 1988) (quoting Kinetic Structures Corp. v. United States, 6 Cl.Ct. 387, 394

(1984); DeMat Air, Inc. v. United States, 2 Cl.Ct. 197, 202 (1983)). Plaintiff contends that the

Agency’s delay in the procurement process coupled with the solicitation requirements for Type

III and Type IV aircraft and operational readiness caused offerors “to bear expenses five times

longer than forecast” and violated CICA. Pl. Mot. for Judgment on the AR 25.

Plaintiff presents no authority to support the proposition that it is a violation of CICA for

an agency to delay an award, causing “difficult but reasonable” solicitation requirements to

become unduly restrictive of competition due to the passage of time. CICA requires procuring

agencies to “obtain full and open competition through the use of competitive procedures in

accordance with the requirements of this division [41 U.S.C. §§ 3301 et seq.] and the Federal

Acquisition Regulation” and to “use the competitive procedure or combination of competitive

procedures,” such as sealed bids “that is best suited under the circumstances of the procurement.”

41 U.S.C. § 3301 (2012).

Plaintiff has not demonstrated that the procedures NAVAIR used in the instant negotiated

procurement – which still has [***] offerors – were anti-competitive or violated any statutory or

FAR provision. Plaintiff does not allege a failure of the Agency to use an identified competitive

procedure required by CICA and the FAR. Rather, Plaintiff persists in attempting to raise an

untimely challenge to the facial terms of the solicitation, by protesting the delay in the

procurement process. While CICA sets forth procedures for the Government to sustain a policy

of full and open competition, the statute does not mandate that a procurement take place in a

certain amount of time or expressly provide that any delay, let alone reasonable, justified delay,

is prohibited. While Plaintiff suggests that it may have to drop out of the competition because it

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can no longer provide Type IV aircraft, it has not yet withdrawn and there is no evidence that the

other [***] offerors cannot meet the Type IV requirement or are planning to withdraw. Indeed,

Plaintiff requests alternative relief that suggests that it could remain in the competition -- that the

Agency “allow all offerors, including Draken, a reasonable opportunity to offer new aircraft in

the event that aircraft that were originally proposed are no longer available due to the delays in

the procurement process.” Am. Compl. at 26. Plaintiff has not established that the restrictive

solicitation terms and delay caused a reduction in competition that rises to the level of a violation

of CICA.

Plaintiff further argues that the Agency violated § 3306(a)(2)(B) of CICA which provides

that agencies may “include restrictive provisions or conditions only to the extent necessary to

satisfy the needs of the executive agency or as authorized by law.” 41 U.S.C. § 3306(a)(2)(B)

(2012). Plaintiff identifies the Agency’s “restrictive provision” here as the solicitation’s

requirements for both Type III and Type IV aircraft and for operational readiness coupled with

the delay in conduct of the procurement. However, Plaintiff cannot establish restrictive

solicitation provisions here because its challenge to these solicitation terms is untimely. Plaintiff

admits that these solicitation provisions were not restrictive at the time it submitted its offer. In

plaintiff’s view, what made the provisions restrictive under CICA was the length of time the

procurement took. But, as Plaintiff admits, this delay did not result from any fault of the Agency

-- either arbitrary and capricious conduct or a separate statutory or regulatory violation. The

original solicitation had an anticipated award date of March 1, 2014. AR at 586. In Amendment

6, due to the Air USA protest and the change in the proposal submission date, the Agency moved

the anticipated award date to April 1, 2014. The Agency did not make an award on April 1,

2014, but continues to engage in discussions with offerors and now anticipates awarding the

contract in February 2015. Decl. of Phillip Smith ¶ 9. These delays have been caused by

legitimate, unremarkable procurement occurrences -- pre-award agency-level and GAO protests

by Air USA and Draken, and the Agency’s need to evaluate offerors’ responses to 107 ENs and

conduct discussions. See id. at ¶¶ 7-9.

Plaintiff purports to combine two agency actions, neither of which was independently

illegal, to construct a violation of procurement law. But Plaintiff’s invocation of procurement

delay does not either convert what were legal solicitation terms into illegal terms, or grant

Plaintiff a reprieve for its untimely challenge to solicitation terms. If this Court permitted

Plaintiff to pursue an untimely challenge to solicitation terms and ordered the Agency to revise

the belatedly challenged solicitation terms merely because there was subsequent legitimate

procurement delay, the Court would do violence to Blue & Gold.

In addition to failing to demonstrate that this procurement delay created the type of

“restrictive solicitation provisions” prohibited by CICA, Plaintiff has failed to appreciate that the

Agency amply justified these challenged solicitation terms. The no-fault delay that ensued did

not vitiate that Justification. The Assistant Secretary’s Determination and Findings articulated

rational reasons for including the Type IV supersonic aircraft along with the Type III subsonic

aircraft in this procurement:

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 The efficiencies gained by having a single provider provide all resources at all

sites as compared to having two contractors at each location using additional

space, tooling, and personnel.

 The ability to fulfill Type III missions with Type IV aircraft billed at the lower

Type III rate, which allowed the Government “to minimize the required quantity

of high subsonic aircraft without compromising the ability to cover surge

requirements.”

 The avoidance of a scenario where two contractors would use overlapping

resources, which would cause logistical difficulties, reduce the funds available for

training and decrease the quality of training provided.

 The recognition that the task orders under the contract are so integrally related

that only a single source could reasonably perform the effort.

 The avoidance of duplication of costs to provide and maintain multiple fleets of

aircraft.

AR 4470-71.

It is well settled that an agency has discretion in defining its needs. See Che Consulting,

Inc. v. United States, 74 Fed. Cl. 742, 747 (2006) (“An agency’s determination of the ‘best

method of accommodating’ its needs . . . falls within the agency's discretion.” (quoting United

Enter. & Assocs. v. United States, 70 Fed. Cl. 1, 26 (2006)). This Court would be hard pressed

to force the Agency to redefine its needs here because such needs have allegedly become

unjustified due to delay that did not result from any procurement error or irrational agency

decision.

This is not to say that an agency’s procurement delay is either a matter of unfettered

agency discretion or immune from judicial review. The Government submits that procurement

delay is purely a matter of procedure that has no effect on the validity of the procurement and

does not alone provide a basis to protest. Def. Cross-Mot. for Judgment on the AR 18 (citing

Am. Fuel Cell and Coated Fabrics Co., B-234395, Feb. 21, 1989, 89-1 CPD ¶ 183 (holding that a

contractor’s protest of an agency’s delay in making an award had no merit because “a delay in

meeting procurement milestones is a procedural deficiency which does not alone provide a basis

of protest, because it has no effect on the validity of the procurement”). This Court does not

agree. Rather, an agency’s illegal, irrational, or arbitrary delay could provide both a basis for

protest and relief. An agency has an obligation of good faith and fair dealing to bidders

participating in Federal procurements, and that duty would prohibit an agency from arbitrarily

unduly delaying a procurement by stringing offerors along, requiring them to be at the ready at

substantial expense for an unnecessarily extended period. See generally Heyer Prod. Co. v.

United States, 135 Ct. Cl. 63, 71 (1956). However, this is not the argument Plaintiff is pressing

in this case. Plaintiff emphasizes that it is not claiming that the procurement delay here resulted

from any arbitrary, capricious, or irrational conduct by the Agency. Dec. 8, 2014 Oral Arg. Tr.

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13:13-21. (“[W]e are not ascribing fault to the agency for the delays. [. . .] And it's not necessary,

in our view, to say that the delays were the agency’s fault.”).

Draken’s Contention That It Was Treated Differently Than Other Offerors is Unripe

Draken argues that the Agency treated it unfairly because the Agency repeatedly stressed

the importance of providing airworthiness data with the initial proposals, yet “appears to have

waived the requirement eight months after offerors were required to comply” for [***] and

[***]. Pl. Mot. for Judgment on the AR 32-35 (emphasis in original). Plaintiff speculates that

the Agency may accept this data from other offerors, will rely on this data, and will not afford

Draken a similar opportunity to provide such data. Id. at 34-35.

ATAC submits that Draken’s arguments that it was treated unfairly and prejudicially are

not ripe because the award has not yet been made. Intervenor’s Mot. for Judgment on the AR at

34-35. The Court agrees with ATAC. This procurement is still ongoing, and the current state of

evaluations and discussions is unknown. Ripeness is a doctrine of justiciability that prevents the

courts, “through avoidance of premature adjudication, from entangling themselves in abstract

disagreements over administrative policies . . . .” Abbott Labs. v. Gardner, 387 U.S. 136, 148

(1967). A claim is not ripe for judicial review when it is contingent upon future events that may

or may not occur. Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81 (1985). In

assessing ripeness, there are two basic factors: “‘(1) the fitness of the issues for judicial

decision[;] and (2) the hardship to the parties of withholding court consideration.’” Sys.

Application & Techs. v. United States, 691 F.3d 1374, 1383-1384 (Fed. Cir. 2012) (quoting

Abbott Labs., 387 U.S. at 149); Tex. Bio- & Agro-Def. Consortium v. United States, 87 Fed. Cl.

798, 804 (Fed. Cl. 2009). In order to be a final decision, and therefore ripe for judicial review,

(1) there must be an agency action that marks “‘the consummation of the agency's

decisionmaking process,’ i.e., it must not be merely tentative or interlocutory, and (2) ‘the action

must be one by which rights or obligations have been determined, or from which legal

consequences will flow.’” NSK, Ltd. v. United States, 510 F.3d 1375, 1385 (Fed. Cir. 2007)

(quoting Bennett v. Spear, 520 U.S. 154, 177 (1997)).

Here, whether Draken will be treated unfairly and prejudicially compared to [***] and

[***] is not yet known and cannot be ascertained until the Agency selects an awardee. In Texas

Bio- & Agro-Defense Consortium, this Court recognized that a proposed site selection was not

ripe for judicial review because negotiations over the transfer of the property to the agency had

not been concluded and because any transfer of the property was contingent upon Congressional

funding. 87 Fed. Cl. at 804-06. This Court reasoned that given the uncertainty over what form

the potential transfer of land and in-kind contributions from the Intervenor to the agency might

take and the multiple potential contingencies, the site selection was not fit for judicial review.

Id. at 806. Similarly, in the instant case, the outcome of what Draken claims is an unfair

evaluation process has not yet occurred, as the Agency is still in the pre-award evaluation stage

of this procurement. Decl. of Philip Smith ¶¶ 4-5. The “consummation of the agency’s

decisionmaking process” will not occur until award. See NSK, Ltd., 510 F.3d at 1385.

Deciding not to review this alleged unequal treatment does not impose any hardship on

Draken. “[W]ithholding court consideration of an action causes hardship to the plaintiff where

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the complained-of conduct has an ‘immediate and substantial impact’ on the plaintiff.” Caraco

Pharm. Labs., Ltd. v. Forest Labs., Inc., 527 F.3d 1278, 1295 (Fed. Cir. 2008) (quoting Gardner

v. Toilet Goods Ass’n, 387 U.S. 167,171 (1967)); Texas Bio- & Agro-Defense Consortium, 87

Fed. Cl. at 806. Withholding consideration of this issue will not harm Draken, as the conduct

that it complains of may not ultimately persist or prejudice Draken.

This Court Will Not Review the Agency’s Denial of Draken’s Agency-Level Protest

Draken argues the Agency’s protest decision was irrational and that the Agency “failed to

provide a coherent and reasonable explanation that justified its decision to deny Draken’s

protest.” Pl. Mot. for Judgment on the AR 30-33. In the bid protest realm, the Court of Federal

Claims is not an appellate tribunal empowered to directly review protest decisions of the agency

or the GAO. Cf. Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989); MG

Altus Apache Co. v. United States, 111 Fed. Cl. 425, 443 (Fed. Cl. 2013) (“While this Court

lacks jurisdiction to review a GAO decision outright, it may assess whether the GAO decision

was rational in order to determine whether the procurement action being challenged — the

agency’s corrective action predicated on that GAO decision — was reasonable.”) (citing

Honeywell, Inc., 870 F.2d at 647-648).

Under § 1491(b)(1), the Court has jurisdiction in bid protest cases “to render judgment on

an action by an interested party objecting to a solicitation by a Federal agency for bids or

proposals for a proposed contract or to a proposed award or the award of a contract or any

alleged violation of statute or regulation in connection with a procurement or a proposed

procurement.” 28 U.S.C. 1491(b)(1) (2012). An agency protest is not a procurement. Thus,

while Draken may disagree with the agency’s denial of its protest, the Court does not have

jurisdiction to review or remand the agency’s protest decision, but instead reviews the agency’s

underlying procurement decision or procurement-related actions. In any event, Plaintiff’s

challenge to the Agency’s protest decision here simply rehashes the grounds of protest it pursued

in this forum -- which this Court rejected without evaluating the agency protest decision.

Conclusion

The Court DENIES Plaintiff’s motion for judgment on the Administrative Record and

Plaintiff’s motion for injunctive relief.

The Court GRANTS Defendant’s motion for judgment on the Administrative Record and

Intervenor’s motion for judgment on the Administrative Record. The Court directs the Clerk to

enter judgment accordingly.

s/Mary Ellen Coster Williams

MARY ELLEN COSTER WILLIAMS

Judge

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