Dell Federal Systems, L.P. v. United States

United States Court of Appeals

for the Federal Circuit

______________________

DELL FEDERAL SYSTEMS, L.P., BLUE TECH INC.,

RED RIVER COMPUTER COMPANY, INC.,

Plaintiffs-Appellees

IRON BOW TECHNOLOGIES, LLC, GOVSMART,

INC., IDEAL SYSTEM SOLUTIONS, INC., NCS

TECHNOLOGIES, INC.,

Plaintiffs

v.

UNITED STATES, HPI FEDERAL, LLC, CDW

GOVERNMENT LLC,

Defendants-Appellants

ALPHASIX CORPORATION, INSIGHT PUBLIC

SECTOR, INC., INTEGRATION TECHNOLGY

GROUPS, INC., STERLING COMPUTERS

CORPORATION,

Defendants

______________________

2017-2516, 2017-2535, 2017-2554

______________________

Appeals from the United States Court of Federal

Claims in Nos. 1:17-cv-00465-TCW, 1:17-cv-00473-TCW,

Judge Thomas C. Wheeler.

______________________

SEALED OPINION ISSUED: September 24, 2018

PUBLIC OPINION ISSUED: October 5, 2018*

* This opinion was originally filed under seal and has

been unsealed in full.

2 DELL FED. SYS., L.P. v. UNITED STATES

______________________

CATHERINE EMILY STETSON, Hogan Lovells US LLP,

Washington, DC, argued for all plaintiffs-appellees.

Plaintiff-appellee Dell Federal Systems, L.P. also repre-

sented by MICHAEL F. MASON, THOMAS PETTIT, CHRISTINE

ALICE REYNOLDS.

JOSEPH ASHMAN, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washing-

ton, DC, argued for defendant-appellant United States.

Also represented by MARTIN F. HOCKEY, JR., ROBERT

EDWARD KIRSCHMAN, JR., CHAD A. READLER; ELINOR KIM,

Contract and Fiscal Law Division, United States Army

Legal Services Agency, Fort Belvoir, VA.

JONATHAN MICHAEL BAKER, Crowell & Moring, LLP,

Washington, DC, argued for defendant-appellant HPI

Federal, LLC. Also represented by DANIEL RUBEN

FORMAN, ELIZABETH ANN BUEHLER, ROBERT JOSEPH

SNECKENBERG.

MICHAEL J. ANSTETT, Fried, Frank, Harris, Shriver &

Jacobson LLP, Washington, DC, for plaintiff-appellee

Blue Tech Inc. Also represented by JAMES J.

MCCULLOUGH, BRENDAN CONNOLLY MCNAMARA, NEAHA P.

RAOL.

GREGORY R. HALLMARK, Holland & Knight, LLP,

McLean, VA, for plaintiff-appellee Red River Computer

Company, Inc. Also represented by ELIZABETH JOCHUM,

Tysons, VA; RODNEY MITCHELL PERRY, Washington, DC.

DAVID MICHAEL NADLER, Blank Rome LLP, Washing-

ton, DC, for defendant-appellant CDW Government LLC.

______________________

Before MOORE, SCHALL, and WALLACH, Circuit Judges.

DELL FED. SYS., L.P. v. UNITED STATES 3

WALLACH, Circuit Judge.

After initially awarding a contract for computer

hardware to original awardees including Dell Federal

Systems, L.P. (“Dell”), Blue Tech, Inc. (“Blue Tech”), and

Red River Computer Company (“Red River”) (collectively,

“Appellees”), the U.S. Department of the Army (“the

Army”) instituted a corrective action1 to reopen procure-

ment and conduct additional discussions with offerors.

J.A. 7009 (Corrective Action). Appellees challenged the

decision to institute corrective action before the U.S.

Court of Federal Claims, which granted Appellees’ cross-

motions for judgment on the administrative record and

permanently enjoined the Army from proceeding with its

corrective action. See Dell Fed. Sys., L.P. v. United States,

133 Fed. Cl. 92, 107 (2017); see also J.A. 1 (Judgment).

Appellants HPI Federal, LLC (“HPI”), CDW Govern-

ment, LLC (“CDW”), and the United States (“the Gov-

ernment”) (collectively, “Appellants”) appeal the opinion

and order of the Court of Federal Claims. We possess

jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (2012).

Because the Court of Federal Claims did not apply the

proper legal standard and we determine the Army’s

corrective action was reasonable under that standard, we

reverse.

1 A “corrective action in the bid protest context” is

an “agency action, usually taken after a protest has been

initiated, to correct a perceived prior error in the pro-

curement process, or, in the absence of error, to act to

improve the competitive process.” Dellew Corp. v. United

States, 855 F.3d 1375, 1378 n.2 (Fed. Cir. 2017) (internal

quotation marks and citation omitted).

4 DELL FED. SYS., L.P. v. UNITED STATES

BACKGROUND

I. The Solicitation

In May 2016, the Army solicited proposals for indefi-

nite-delivery, indefinite-quantity contracts for “commer-

cial-off-the-shelf” computer hardware such as desktop

computers, tablet computers, and printers under Solicita-

tion No. W52P1J-15-R-0122 (“the Solicitation”).

J.A. 1341; see J.A. 1339–87. The total estimated contract

value was $5 billion over a ten-year period. J.A. 1341.

While the Army anticipated “mak[ing] at least eight

[contract] awards, with up to five reserved for small

business[es],” J.A. 1341, the Solicitation left open the

possibility that “the [Army] . . . may make as many, or as

few, awards as deemed appropriate,” J.A. 1384.

The Solicitation stated that the competition would be

conducted in accordance with the procedures outlined in

Federal Acquisition Regulations (“FAR”) Part 15, “Con-

tracting by Negotiation,” and the Army would therefore

award contracts to the lowest priced, technically accepta-

ble offerors. J.A. 1384; see FAR 15.101-2(a) (2015) (ex-

plaining that the “lowest price technically acceptable

source selection process is appropriate when best value is

expected to result from selection of the technically ac-

ceptable proposal with the lowest evaluated price”). The

Solicitation further stated offerors would be evaluated

based on “an integrated assessment of three evaluation

factors” of “Technical Approach, Past Performance, and

Price,” and any relevant attendant sub-factors. J.A. 1385.

To be considered for an award, the Solicitation required

offerors to achieve an “‘Acceptable’ [rating] . . . for the

Technical Approach and its two sub-factors and the Past

Performance [f]actor.” J.A. 1385. For the two Technical

Approach sub-factors, offerors were required to complete

an attached “Equipment Submission Form” and “Business

Process Form” in Microsoft Excel. J.A. 1381–82; see, e.g.,

J.A. 1388–421 (Equipment Submission Form spreadsheet

DELL FED. SYS., L.P. v. UNITED STATES 5

template), 1422–25 (Business Process Form spreadsheet

template). For the Equipment Submission Form, offerors

were instructed to “complete all cell entries” and “identify

the Original Equipment Manufacturer (OEM)[] model and

salient characteristics of each proposed item,” and were

advised that “[a]n incomplete or blank entry will indicate

that the proposed item does NOT meet minimum re-

quirements.” J.A. 1382.

To evaluate the offerors’ bids, the Army’s evaluation

team consisted of a Source Selection Authority (“SSA”), a

Source Selection Evaluation Board (“SSEB”), and a Pro-

curing Contracting Officer (“CO”). J.A. 1303. The SSEB

would “review and evaluat[e] . . . proposals against the

[S]olicitation requirements and the approved evaluation

criteria,” J.A. 1307, and document their evaluation results

in a Source Section Decision Document report, J.A. 5573.

Based upon that report, the SSA would either “[m]ake a

determination to award without discussions or enter into

discussions” and make “the final source selection deci-

sion . . . before contracts [were] awarded or announced.”

J.A. 1304.

The Army reserved the right “to conduct discussions

and to permit [o]fferors to revise proposals if determined

necessary by the [CO].” J.A. 1379; see J.A. 1468 (stating,

in an amendment to the Solicitation, “the [Army] intends

to award without conducting discussions”); see also

FAR 15.306(d) (defining discussions as exchanges “under-

taken with the intent of allowing the offeror to revise its

proposal”). The Solicitation further explained that “[i]f

discussions are opened, all proposals, to include small

business proposals previously removed for unacceptabil-

ity[,] . . . will be included. After discussions are closed and

final proposal revision[s] are received, the [Army] will

separate proposals, re-list[,] and evaluate” in accordance

with the procedures for the competition categories, i.e.,

full and open competition category, and reserved small

business category. J.A. 1384.

6 DELL FED. SYS., L.P. v. UNITED STATES

II. Source Selection and Award

The Army received fifty-eight proposals, with fifty-two

from small businesses. J.A. 5574. Three proposals were

rejected as non-responsive, and of the fifty-five proposals

that were evaluated, nine were deemed acceptable for the

Technical Approach and Past Performance evaluation

factors, see J.A. 5574; see also J.A. 5575–77 (detailing

each party’s rating for each evaluation factor), with all

nine final prices found to be fair and reasonable, see J.A.

5579–80. The SSEB said it did “not have a meaningful

reason to open discussions” with offerors because doing so

“would significantly delay award.” J.A. 5534. In Febru-

ary 2017, the Army awarded nine contracts: five con-

tracts under the small business category, including to

Blue Tech and Red River, and four under the full and

open competition category, including to Dell. J.A. 5573,

5580; see J.A. 5579 (identifying which awardees relate to

each category).

III. Post-Award Protests and the Army’s Corrective Action

Following the award decision, HPI, CDW, and nine-

teen other unsuccessful offerors filed protests at the U.S.

Government Accountability Office (“GAO”). See, e.g., J.A.

6296–305 (CDW’s GAO protest), 6346–427 (HPI’s GAO

protest). An Army memorandum for record (“MFR”), inter

alia, summarizes how the “primary protest allegations”

protested the Army’s evaluations as unreasonable because

the proposal deficiencies the Army considered disqualify-

ing were minor or “clerical errors and misunderstandings”

resulting from Solicitation ambiguities that could have

been resolved through clarifications as defined in FAR

15.306(a)(2). 2 J.A. 7019; see, e.g., J.A. 6033, 6297. Sever-

2 Clarifications “are limited exchanges, between the

Government and offerors, that may occur when award

DELL FED. SYS., L.P. v. UNITED STATES 7

al protests also argued that the Army should have en-

gaged in discussions with offerors to resolve these spread-

sheet-related misunderstandings, as required by Defense

Federal Acquisition Regulations Supplement

(“DFARS”) 215.306(c), and to resolve claimed misunder-

3

standings relating to the completion of the Excel spread-

sheets. See, e.g., J.A. 6367–69; see also

DFARS 215.306(c)(1) (“For acquisitions with an estimated

value of $100 million or more, contracting officers should

conduct discussions.” (emphasis added)).

In response to the GAO protest, the Army conducted

an internal review, see J.A. 7018, and issued its Notice of

Corrective Action, informing GAO that it had decided

“that it would be in the Army’s best interest to take

corrective action to resolve all the protests,” J.A. 7009

(emphasis added). The Army stated that such corrective

action would “consist of the following: (1) opening discus-

sions with all of the remaining offerors, including those

who filed protests, (2) requesting final revised proposals,

and (3) issuing a new award decision.” J.A. 7009.

The Army also released its MFR documenting its ra-

tionale for proposing corrective action in light of the GAO

protests. See J.A. 7018–21 (MFR). First, the CO ex-

without discussions is contemplated.” FAR 15.306(a)(1).

“If award will be made without conducting discussions,

offerors may be given the opportunity to . . . resolve minor

or clerical errors.” FAR 15.306(a)(2).

3 While the FAR System establishes “uniform poli-

cies and procedures for acquisition by all executive agen-

cies,” FAR 1.101, the DFARS is the Department of

Defense’s “implementation and supplementation of the

FAR,” DFARS 201.301(a)(1), and “is codified under chap-

ter 2 in title 48, Code of Federal Regulations,”

DFARS 201.303(a)(i).

8 DELL FED. SYS., L.P. v. UNITED STATES

plained how the Army’s counsel found that because the

procurement was valued in excess of $100 million, the

Army was likely required to conduct discussions with

offerors pursuant to DFARS 215.306(c)(1). See

J.A. 7018−19 (explaining that the SSEB’s reasoning of

award delay did not constitute a reasonable basis for

forgoing discussions); see also J.A. 5534 (providing the

SSEB’s reasoning). Second, counsel found that there was

“ambiguity in the requirements or the [Army’s] instruc-

tions [on] how to fill out the [Equipment Submission Form

and Business Process Form Microsoft Excel] spread-

sheet[s],” which “could have easily and quickly been

resolved” before award and could have been addressed in

discussions. J.A. 7020; see J.A. 7020 (stating many of the

“Unacceptable” ratings were “merely compliance issues

with filling out the form rather than a deficiency in the

item proposed”). The Army summarized two representa-

tive examples of the ambiguities: (1) the presence of a

thick, black line “hard-line” in the Equipment Submission

Form spreadsheet between the hard-drive and solid-state

drive requirements; and (2) the conflicting instructions

that “an upgrade [to a base model] must be an increase in

capability” and “that selection of an item in a drop-down

[menu] is acceptable when there are items in the drop-

down that are not upgrades to a base model.” J.A. 7020;

see, e.g., J.A. 386 (depicting the hardline). Ultimately,

Army’s counsel recommended that “[d]ue to the signifi-

cant litigation risk, the ambiguities in the spread-

sheet . . . , and a matter of policy to do what is

right, . . . [the Army] take limited corrective action to

resolve the issues with Offerors’ Technical Proposals.”

J.A. 7021.

As a result of the Army’s proposed corrective action,

the GAO dismissed the unsuccessful offerors’ protests as

moot. See J.A. 7022–23. The Army subsequently notified

offerors that “[d]iscussions with all offerors in the compet-

itive range are now open” and invited offerors to present

DELL FED. SYS., L.P. v. UNITED STATES 9

their “best and final proposal,” J.A. 7047 (letter to origi-

nally successful offeror), and the Army advised originally

unsuccessful offerors to “address the deficiencies in [their]

proposal[s],” J.A. 7076, and to revise their final prices “to

their best and final prices,” J.A. 7077. In addition, “to

remedy [any] potential competitive [dis]advantage” to

offerors whose prices were disclosed by the original award

notice, the Army sent all offerors a Microsoft Excel

spreadsheet of the final proposed prices, with offerors not

identified. J.A. 7378; see J.A. 7379–80 (listing prices).

IV. The Relevant Proceedings

Two of the nine initial awardees, specifically Dell and

Blue Tech, sued the Government in the Court of Federal

Claims, seeking to enjoin the Army’s corrective action, see

J.A. 290, and five other initial awardees, including Red

River, joined as intervenors, Dell, 133 Fed. Cl. at 100. 4

The cases were consolidated. Id. The Appellees then

sought a permanent injunction, arguing that the correc-

tive action was unlawful, and the proposed corrective

action to reopen the competition was not reasonable

under the circumstances. See id. 5

In its Opinion and Order, the Court of Federal Claims

granted the Appellees’ request for declaratory relief and a

permanent injunction of the Army’s corrective action. Id.

at 107; see id. at 104–07 (analyzing the four-pronged test

4 Because the parties do not dispute the relevant

procedural history, see generally Gov’t’s Br.; HPI’s Br.;

CDW’s Br.; Blue Tech’s Br.; Dell’s Br.; Red River’s Br., we

cite to the Court of Federal Claims’ recitation for conven-

ience.

5 The Army voluntarily stayed the corrective action

pending resolution of the litigation. J.A. 281.

10 DELL FED. SYS., L.P. v. UNITED STATES

for injunctive relief in favor of Appellees); see Centech

Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir.

2009) (outlining the four-pronged permanent injunction

test as (1) success on the merits, (2) irreparable harm,

(3) the balance of hardships, and (4) the public interest).

As to success on the merits, the Court of Federal Claims

determined that, while it agreed that the Army had

rationally identified procurement defects, the “Army’s

contemplated corrective action [wa]s overbroad.” Dell,

133 Fed. Cl. at 104 (capitalization modified); see id. (not-

ing that “the Army rationally identified two procurement

defects”: (1) “ambiguities in the Equipment Submission

Form” and (2) “the Army’s failure to hold discussions”); id.

at 104 (stating that “[e]ven where an agency has rational-

ly identified defects in its procurement, its corrective

action must narrowly target the defects it is intended to

remedy” (internal quotation marks and citation omitted)),

106 (holding that the Army’s corrective action “is not

rationally related to any procurement defects”). The

Court of Federal Claims also found all three other prongs

of the permanent injunction test weighed in favor of

Appellees, id. at 107, and therefore entered a permanent

injunction, J.A. 1. 6

6 As to irreparable harm, the Court of Federal

Claims found this factor weighed in favor of the Appellees

because “[Appellees] would be forced to re[-]compete

wholesale for contracts they have already won” and

“discussions would also force the [Appellees] to bid

against their own prices.” Dell, 133 Fed. Cl. at 107. As to

the balance of hardships, it found that this factor weighed

in favor of Appellees because while “[t]he Government

would suffer some hardship if it decided to engage in more

limited clarification exchanges,” “the [Appellees] would

face an elevated risk of losing their awards if the Army

DELL FED. SYS., L.P. v. UNITED STATES 11

DISCUSSION

On appeal, Appellants contend that we should reverse

the Court of Federal Claims’ grant of a permanent injunc-

tion because (1) the Court of Federal Claims applied the

wrong standard in considering success on the merits

because it assessed whether the Army’s proposed correc-

tive action was “narrowly targeted” to remedy a procure-

ment defect, Gov’t’s Br. 21, 7 and (2) under the proper legal

framework, “the Army’s corrective action is rationally

related to the procurement defect,” id. at 26 (capitaliza-

tion modified). We begin with the governing standards

and then address Appellants’ arguments in turn.

I. Standard of Review and Legal Standard

We review “the [Court of Federal Claims’] determina-

tion on the legal issue of the government’s conduct, in a

grant of judgment upon the administrative record, with-

out deference.” Per Aarsleff A/S v. United States, 829

F.3d 1303, 1309 (Fed. Cir. 2016) (citation omitted). We

review “[p]rotests of agency procurement deci-

sions . . . under the standards set forth in the Administra-

tive Procedure Act (‘APA’).” Id. (citing 28 U.S.C.

§ 1491(b)(4)); see APA, 5 U.S.C. §§ 551–559, 701–706,

were to conduct discussions.” Id. As to the public inter-

est, the Court of Federal Claims determined that the

“public interest favors granting injunctive relief here”

because “allowing an agency to respond disproportionate-

ly to minor procurement errors harms the integrity of the

procurement system” and “introduces an unfair and

unanticipated additional layer of competition.” Id.

7 Appellants make substantially similar arguments

on appeal. See Gov’t’s Br. 22; HPI’s Br. 15; CDW’s Br. 15.

For ease of reference, we cite only to the Government’s

arguments unless otherwise noted.

12 DELL FED. SYS., L.P. v. UNITED STATES

1305, 3105, 3344, 4301, 5335, 5372, 7521 (2012). The

APA provides that “a reviewing court shall set aside the

agency action if it is arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.”

Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed.

Cir. 2013) (internal quotation marks and citation omit-

ted); see 5 U.S.C. § 706(2)(A). We have held that “[u]nder

[the APA] standards, a reviewing court may set aside a

procurement action,” such as a corrective action, “if (1) the

procurement official’s decision lacked a rational basis; or

(2) the procurement procedure involved a violation of

regulation or procedure.” Centech Grp., 554 F.3d at 1037

(internal quotation marks and citation omitted); see id. at

1036–37 (treating a corrective action as a type of pro-

curement action).

In evaluating a bid protest case, the Court of Federal

Claims “may award any relief that the court considers

proper, including declaratory and injunctive relief.” 28

U.S.C. § 1491(b)(2) (emphasis added). To grant injunctive

relief, the Court of Federal Claims “must consider wheth-

er (1) the plaintiff has succeeded on the merits, (2) the

plaintiff will suffer irreparable harm if the court with-

holds injunctive relief, (3) the balance of hardships to the

respective parties favors the grant of injunctive relief, and

(4) the public interest is served by a grant of injunctive

relief.” Centech Grp., 554 F.3d at 1037 (citation omitted).

“We give deference to the Court of Federal Claims’ deci-

sion to grant or deny injunctive relief, only disturbing the

court’s decision if it abused its discretion.” PGBA, LLC v.

United States, 389 F.3d 1219, 1223 (Fed. Cir. 2004) (cita-

tion omitted). An abuse of discretion exists where the

Court of Federal Claims “made a clear error of judgment

in weighing the relevant factors or exercised its discretion

DELL FED. SYS., L.P. v. UNITED STATES 13

based on an error of law or clearly erroneous fact finding.”

Id. (internal quotation marks and citation omitted). 8

II. Injunctive Relief

A. The Court of Federal Claims Abused Its Discretion in

Granting a Permanent Injunction Because It Improperly

Assessed the Success on the Merits Prong

The Court of Federal Claims summarized the ques-

tion before it as “whether holding post-award discussions

is a rational remedy for failing to hold pre-award discus-

8 Before discussing the merits of the appeal, we

first address the threshold issue of jurisdiction. See

Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541

(1986) (recognizing that we have an independent “obliga-

tion to satisfy [ourselves] not only of [our] own jurisdic-

tion, but also that of the lower courts”). Pursuant to the

Tucker Act, the Court of Federal Claims has bid protest

jurisdiction to adjudicate 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). The

Court of Federal Claims had jurisdiction because the

Appellees are interested parties that have bid on the

Solicitation and have alleged violations of the FAR and

DFARS. See id.; see also Sys. Application & Techs., Inc. v.

United States, 691 F.3d 1374, 1381 (Fed. Cir. 2012) (“This

court has made clear that bid protest jurisdiction arises

when an agency decides to take corrective action even

when such action is not fully implemented.”). We, in turn,

have jurisdiction over this appeal pursuant to 28 U.S.C.

§ 1295(a)(3) (2012).

14 DELL FED. SYS., L.P. v. UNITED STATES

sions.” Dell, 133 Fed. Cl. at 105. It held that “the Army’s

corrective action is not rationally related to any procure-

ment defects.” Id. at 106. However, in so holding, the

Court of Federal Claims applied a heightened standard,

requiring that a reasonable “corrective action must nar-

rowly target the defects it is intended to remedy.” Id. at

104 (internal quotation marks and citation omitted). The

Court of Federal Claims thus enjoined the corrective

action because it felt there was “a more narrowly targeted

post-award solution that the Army entirely failed to

consider: clarifications and reevaluation.” Id. at 105.

Appellants argue that the Court of Federal Claims erred

in determining that Appellees had demonstrated success

on the merits by employing an incorrect standard. See

Gov’t’s Br. 21–22; see also Dell, 133 Fed. Cl. at 107.

Specifically, Appellants argue that the Court of Federal

Claims applied a “more exacting [standard] than the

APA’s ‘rational basis’ review threshold for procurement

protests, and impermissibly restrict[ed] the great defer-

ence the Tucker Act requires courts to afford agency

procurement officials” by its use of a “narrowly targeted”

standard. Gov’t’s Br. 22. We agree with Appellants.

The Court of Federal Claims based its decision on an

error of law because corrective action only requires a

rational basis for its implementation. Although the Court

of Federal Claims has previously and occasionally em-

ployed a “narrow targeting” test to evaluate the appropri-

ateness of a corrective action, see, e.g., Amazon Web

Servs., Inc. v. United States, 113 Fed. Cl. 102, 115 (2013)

(employing, by the same Court of Federal Claims judge,

“narrowly target” language when reviewing a corrective

action), “the Court of Federal Claims must follow relevant

decisions of the Supreme Court and the Federal Circuit,

not the other way around,” Dellew, 855 F.3d at 1382

(footnote omitted). We have never adopted this height-

ened “narrowly targeted” standard, as both parties con-

cede. See Oral Arg. at 1:26–46, 21:06–19,

DELL FED. SYS., L.P. v. UNITED STATES 15

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

17-2516.mp3.

Instead, we have consistently reviewed agencies’ cor-

rective actions under the APA’s “highly deferential”

“rational basis” standard. Croman, 724 F.3d at 1363

(internal quotation marks and citation omitted); see id. at

1367 (affirming the Court of Federal Claims’ grant of

summary judgment in favor of the Government where the

agency’s corrective action “decisions were rationally based

and not contrary to law”); see, e.g., Raytheon Co. v. United

States, 809 F.3d 590, 595 (Fed. Cir. 2015) (explaining

that, “for us to uphold the [agency’s] decision to reopen

the bidding process, it is sufficient . . . that the grounds

relied on by the [agency] . . . rationally justified the reo-

pening under governing law” (emphasis added)); Chap-

man Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d 934,

938 (Fed. Cir. 2007) (affirming Court of Federal Claims’

inquiry, which considered the “reasonableness of the

Government’s . . . proposed corrective action”). 9 The

rational basis test asks “whether the contracting agency

provided a coherent and reasonable explanation of its

9 Even the Appellees do not dispute that we ulti-

mately determine whether an agency’s corrective action

lacked a “rational basis” by assessing the reasonableness

of the corrective action. See, e.g., Dell’s Br. 14 (“To be

found reasonable, an agency’s corrective action must be

rationally related to the defect to be corrected . . . .”); Blue

Tech’s Br. 21 (similar); Red River’s Br. 5 (similar). How-

ever, as addressed herein, Appellees dispute the latitude

afforded the lower court to apply and narrow the reasona-

bleness analysis. See, e.g., Dell’s Br. 18 (disagreeing with

the Government’s “conten[tion] that [use of] th[e] ‘more

narrowly targeted’ test unduly constrains the Army’s

discretion” under a court’s reasonableness review).

16 DELL FED. SYS., L.P. v. UNITED STATES

exercise of discretion.” Banknote Corp. of Am., Inc. v.

United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (in-

ternal quotation marks and citation omitted); see id. at

1355–56 (upholding a “best value” award decision and

finding a procurement official acted “within the scope of

[his] discretion” in making “a reasonable judgment” to

weigh equally a solicitation’s “price and technical factors”

despite “the solicitation’s silence regarding the relation-

ship between the [two]” because “the additional cost of [an

unsuccessful bidder’s] proposal would not offset its strong

technical evaluation”).

When determining whether a court committed legal

error in selecting the appropriate legal standard, we

determine which legal standard the tribunal applied, not

which standard it recited. See Int’l Custom Prods., Inc. v.

United States, 843 F.3d 1355, 1359 (Fed. Cir. 2016) (stat-

ing that “a single reference to an incorrect legal standard

does not undermine a final decision, only its application

does” and holding that, despite referencing an incorrect

legal standard, the court under review did not err because

it “repeatedly applied the correct . . . standard”). Here,

although the Court of Federal Claims framed its standard

of review and conclusions in terms of rationality and

reasonableness, see Dell, 133 Fed. Cl. at 101, 105, 106, it

actually applied a heightened “narrowly targeted” stand-

ard, see id. at 105–06 (performing a fact-intensive analy-

sis under a heightened “narrowly targeted” review of the

Army’s corrective action, and finding “there is a more

narrowly targeted post-award solution that the Army

entirely failed to consider[,] clarifications and reevalua-

tion” “of proposals as a more natural expedient for the

minor clerical errors it had identified”). Asking whether a

selected remedy is as narrowly targeted as possible to an

identified error in the bidding process requires more than

a finding of rationality or reasonableness; therefore, the

Court of Federal Claims improperly applied an overly

stringent test for corrective action. Cf. Ala. Aircraft

DELL FED. SYS., L.P. v. UNITED STATES 17

Indus., Inc.-Birmingham v. United States, 586 F.3d 1372,

1376 (Fed. Cir. 2009) (reversing the Court of Federal

Claims, where an agency made “a determination well

within [its] discretion,” but the Court of Federal Claims

“attempt[ed] to rewrite the [request for proposals] . . . in

the manner the court preferred,” such that it “went be-

yond the scope of the court’s [APA] review[] and amounted

to an impermissible substitution of the court’s judgment

for the agency’s with regard to how the contract work

should be designed”).

This error is due in part to the Court of Federal

Claims’ improper reliance on its decision in Amazon Web.

See Dell, 133 Fed. Cl. at 104. In Amazon Web, the Court

of Federal Claims held that a corrective action was over-

broad, explaining that “even where a protest is justified,

any corrective action must narrowly target the defects it

is intended to remedy.” 113 Fed. Cl. at 115 (citation

omitted). The Court of Federal Claims’ reliance on Ama-

zon Web is incorrect for two reasons. First, as we outlined

above, the Court of Federal Claims gave greater weight to

the defective legal standard as recited in Amazon Web

than our holdings in Chapman, Croman, Raytheon, and

Banknote. Federal Circuit precedent is “binding on this

court as it is binding on the Court of Federal Claims.”

Crowley v. United States, 398 F.3d 1329, 1335 (Fed. Cir.

2005). Second, binding precedent aside, Amazon Web, in

any event, is factually distinguishable. The defects in

Amazon Web were associated with only the agency’s

evaluation process, see 113 Fed. Cl. at 109, 116, and not

with the agency’s original solicitation and proposals, as is

the case here. Moreover, in Amazon Web, the Court of

Federal Claims found no rational basis based upon the

agency’s lack of “a narrowly tailored” corrective action

that sought to amend the Solicitation despite no alleged

defects with the solicitation or proposals. See id. at 116.

Here, we have both alleged and undisputed procurement

defects, and unlike Amazon Web, the Army has not pro-

18 DELL FED. SYS., L.P. v. UNITED STATES

posed changing its original requirements when reevaluat-

ing the offerors’ proposals. For these reasons, the Court

of Federal Claims improperly relied upon Amazon Web to

find that the corrective action was not “narrowly targeted”

and therefore overbroad and not reasonable.

We disagree with the Appellees’ main counterargu-

ment that we should view the “narrowly targeted” re-

quirement not as a heightened standard but rather as an

application of the rational basis standard. See Blue

Tech’s Br. 24–25; Dell’s Br. 16–19. Specifically, Appellees

argue that corrective action cases are too “fact specific” for

only one agreed-upon application of the legal standard,

and they advocate a “reasonable under the circumstances”

analysis. Blue Tech’s Br. 24 (quoting WHR Grp., Inc. v.

United States, 115 Fed. Cl. 386, 397 (2014)); see id.

(“[G]iven the substantial differences . . . from procurement

to procurement, ‘there can be no universal test as to what

constitutes appropriate corrective action.’”); Dell’s Br. 19–

23 (similar); Red River’s Br. 4 (referring to the tests as

“two sides of the same coin”). Not only is WHR Group a

decision of the Court of Federal Claims that is not binding

on us, Dellew, 855 F.3d at 1382, but WHR Group does not

support a “narrowly targeted” standard. Instead, WHR

Group only references in passing various types of evidence

used to prove whether the contracting agency had a

rational basis for taking a corrective action, such as “a

defect in a solicitation,” a “legislative reduction of a pro-

gram,” or “legitimate budgetary needs.” 115 Fed. Cl. at

397. Adopting the “narrowly targeted” standard would

undermine our deferential APA review, which statutorily

mandates that we determine “whether the contracting

agency provided a coherent and reasonable explanation of

its exercise of discretion.” Banknote, 365 F.3d at 1351

(internal quotation marks and citation omitted). Because

the heightened “narrowly targeted” standard finds no

support in the statute or our precedent, we hold that the

DELL FED. SYS., L.P. v. UNITED STATES 19

Court of Federal Claims erred in applying an incorrect

legal standard to review the Army’s corrective action.

B. The Army’s Corrective Action Had a Rational Basis

The Court of Federal Claims concluded, inter alia,

that despite it being “reasonable” for the Army to “consid-

er[] its failure to conduct discussions to be a procurement

defect,” the only time to have those discussions was pre-

award, and therefore reopening procurement post-award

was overbroad and improper. 10 Dell, 133 Fed. Cl. at 103;

see id. at 106 (stating that “it was [not ]rational for the

Army to fail to consider [more narrowly tailored] clarifica-

tions and reevaluation of proposals as a more natural

expedient for the minor clerical errors it had identified”),

id. (“The Army instead opened wide-reaching discussions

with all remaining offerors and allowed all offerors to

submit modified proposals with new prices, despite hav-

10 The parties do not dispute the Court of Federal

Claims’ finding that procurement defects existed, namely

the separate, identified defects of spreadsheet ambiguities

and the failure to conduct discussions. Dell, 133 Fed. Cl.

at 103 (“[I]t was rational for the Army to find defects in

the ambiguous spreadsheets . . . [because it] confused

offerors and led many of them to input their line item

responses incorrectly[,] . . . result[ing in] . . . many offe-

rors [being deemed] technically unacceptable.”); id. at 104

(stating “it was rational for the Army to find that it may

have failed the reasonableness test [previously] articulat-

ed [by GAO] when it decided to forgo discussions” in a $5

billion procurement contract in likely violation of DFARS

215.306(c)(1)); see, e.g., Gov’t’s Br. 18 (“The trial court

correctly concluded that the Army reasonably determined

that the solicitation was defective . . . .”); Blue Tech’s Br. 2

(arguing only that the proposed corrective action is not a

“logical correction” to the “defective solicitation”).

20 DELL FED. SYS., L.P. v. UNITED STATES

ing disclosed the [Appellees’] winning prices.”). The

Government argues that we should reverse the Court of

Federal Claims’ permanent injunction because the Army’s

corrective action to reopen procurement was in fact rea-

sonably related to the Solicitation’s procurement defects,

J.A. 7009, both because such a corrective action is directly

and reasonably related to its “likely violat[ion]” of DFARS

215.306(c)(1) by failing to conduct pre-award discussions

for a high-valued solicitation, Gov’t’s Br. 26, and because

“clarifications cannot be used to correct material proposal

mistakes,” id. at 30 (capitalization modified). We agree

with the Government.

Reviewing the corrective action under the proper legal

standard, we hold the Army’s original notice of corrective

action was reasonable, and through our reversal of the

lower court’s injunction, this is the corrective action we

analyze and reinstate. See J.A. 7009 (Notice of Corrective

Action). The Army’s corrective action “consists of the

following: (1) opening discussions with all of the remain-

ing offerors, including those who filed protests, (2) re-

questing final revised proposals, and (3) issuing a new

award decision.” J.A. 7009. The Army’s proposed correc-

tive action to reopen procurement and allow proposals to

be revised is rationally related to the procurement’s

defects, i.e., failure to conduct discussions and spread-

sheet ambiguities. Spreadsheet ambiguities may not

always require reopening the procurement process. See

Info. Tech. & Applications Corp. v. United States, 316

F.3d 1312, 1322 (Fed. Cir. 2003) (explaining, for example,

that “[r]ather than being ‘for the sole purpose of eliminat-

ing minor irregularities, informalities, or apparent cleri-

cal mistakes,’ clarifications now provide offerors ‘the

opportunity to clarify certain aspects of proposals (e.g.,

the relevance of an offeror’s past performance information

and adverse past performance information to which the

offeror has not previously had an opportunity to re-

spond)’”). However for the other expressly stated defect of

DELL FED. SYS., L.P. v. UNITED STATES 21

failure to conduct discussions, the only way to conduct

discussions as contemplated here is to reopen the pro-

curement process to solicit revised proposals. See id. at

1321 (“[D]iscussions involve negotiations[ and] may

include ‘bargaining,’ which ‘includes persuasion, altera-

tion of assumptions and positions, give-and-take, and may

apply to price, schedule, technical requirements . . . , or

other terms of a proposed contract. A[nd] unlike clarifica-

tions, discussions ‘are undertaken with the intent of

allowing the offeror to revise its proposal.’” (citations

omitted)).

Contrary to the Court of Federal Claims’ incorrect

characterization of the identified spreadsheet defects as

“relatively minor,” we find that the identified defects in

the Solicitation that led to “the majority of the offerors”

being disqualified––due to their submission of technically

unacceptable offers––were highly material. Dell, 133 Fed.

Cl. at 104. An offeror’s understanding of what computer

equipment it may or may not propose is certainly material

to this procurement for computer equipment and accesso-

ries. The offeror’s computer equipment models are the

primary technical elements upon which the offerors are

being evaluated, see J.A. 1388–421, and the ambiguity

pertained to filling out the Equipment Submission Form,

which allows the offerors to identify their computer

equipment, see J.A. 386, 7020. Correcting the solicitation

ambiguity to allow the offerors to properly identify their

equipment, therefore, goes well beyond omitted clerical

information. 11

11 Indeed, the Court of Federal Claims acknowl-

edged that, while “many of the losing offerors in this

procurement made minor or clerical errors” allegedly

capable of correction through clarifications, Dell, 133 Fed.

Cl. at 105, there were offerors that made “more wide-

22 DELL FED. SYS., L.P. v. UNITED STATES

Pursuant to the APA, an agency’s actions must be “in

accordance with law.” 5 U.S.C. § 706(2)(A). Moreover, an

agency is bound by the “applicable procurement statutes

and regulations.” Alfa Laval Separation, Inc. v. United

States, 175 F.3d 1365 (Fed. Cir. 1999); see Blue & Gold

Fleet, LP v. United States, 70 Fed. Cl. 487, 512 (2006) (“An

agency has no discretion regarding whether or not to

follow applicable laws and regulations.”), aff’d, 492 F.3d

1308 (Fed. Cir. 2007). Pursuant to DFARS 215.306(c)(1),

“[f]or acquisitions with an estimated value of $100 million

or more, contracting officers should conduct discussions.”

Therefore, discussions normally are to take place in these

types of acquisitions. See SAS Inst., Inc. v. Iancu, 138 S.

Ct. 1348, 1354 (2018) (“The word ‘shall’ generally imposes

a nondiscretionary duty.”); see also Johnson v. McDonald,

762 F.3d 1362, 1365 (Fed. Cir. 2014) (interpreting a

regulation by ascertaining its plain meaning). FAR 2.101

defines “should” to mean “an expected course of action or

policy that is to be followed unless inappropriate for a

particular circumstance,” and the GAO has applied FAR

2.101 to interpret DFARS 215.306(c)(1). See Sci. Applica-

tions Int’l Corp. (SAIC), No. B-413501, 2016 WL 6892429,

at *8 (Comp. Gen. Nov. 9, 2016) (finding, in a case of first

impression by the GAO, that DFARS 215.306(c)(1) is

reasonably read to mean that “discussions are the ex-

pected course of action in [Department of Defense] pro-

curements valued over $100 million” (emphasis added)).

Here, the total procurement is estimated at $5 billion,

J.A. 1341, which clearly exceeds the $100 million thresh-

old of DFARS 215.306(c)(1). While it is true that we

afford great discretion to a reasonable agency decision, see

Turner Constr. Co. v. United States, 645 F.3d 1377, 1381

(Fed. Cir. 2011) (“It is well settled that COs are given

reaching errors” that were not capable of correction via

clarification, id. at 106.

DELL FED. SYS., L.P. v. UNITED STATES 23

broad discretion in their evaluation of bids. When

a[ CO’s] decision is reasonable, neither a court nor the

GAO may substitute its judgment for that of the agency.”

(citations omitted)), as the Court of Federal Claims recog-

nized, “it was rational for the Army” to determine that the

decision “to forgo discussions” with at best “threadbare

and conclusory” reasons likely “failed the reasonableness

test articulated in SAIC,” Dell, 133 Fed. Cl. at 104; see

J.A. 7019–20 (citing J.A. 5534). Had the Army conducted

pre-award discussions, several of the lower-priced offerors

deemed unacceptable––either as a result of ambiguous

Solicitation requirements or otherwise––might have

revised their initial proposals, which then might plausibly

have been found technically acceptable. Opening discus-

sions with all offerors at this stage in the process, as

coherently explained here by the Army, see J.A. 7019–20,

is a reasonable vehicle to allow offerors to propose compli-

ant equipment and modify prices accordingly, see Bank-

note, 365 F.3d at 1351. We determine that the corrective

action of conducting discussions is rationally related to

the undisputed procurement defect of originally failing to

conduct pre-award discussions, as reasonably interpreted

by the agency to be required by the applicable regulations,

in the first instance. See J.A. 7019–20.

The Appellees contend that the Army’s decision to

conduct discussions was an unreasonable corrective

action, “even assuming the [Court of Federal Claims]

applied the ‘wrong standard.’” Blue Tech’s Br. 27 (capital-

ization modified). Specifically, they argue the action was

unreasonable because the defects were identified after the

initial award decisions were made, in effect arguing that

the reasonableness inquiry is different in the pre- and

post-award context. See id. at 27–28 (“[T]he posture of

this procurement is fundamentally different from what it

would have been had the Army engaged in discussions

before announcing nine of the offerors’ proposed prices.”);

Dell’s Br. 30 (“Even accepting that the Army should have

24 DELL FED. SYS., L.P. v. UNITED STATES

held discussions earlier in the process, it does not follow

that the proper remedy for that error is to hold far-

reaching discussions now.”); Red River’s Br. 8 (“While

failure to conduct pre-award discussions could be properly

remedied by conducting discussions before the awards

were announced and the awardees’ prices disclosed, the

same is not true in the post-award environment.”). How-

ever, the Appellees cite no precedent, nor do we find any,

to support the imposition of a pre- and post-award dichot-

omy in our reasonableness analysis for corrective action.

Since opening discussions was a reasonable corrective

action, see supra, pursuant to the express terms of the

Solicitation, “[i]f discussions are opened, all proposals, to

include small business proposals previously removed for

unacceptability . . . will be included,” J.A. 1384. We do

not disrupt on appeal the Army’s adherence to the terms

of the Solicitation in implementing its corrective action to

open discussions. See Croman, 724 F.3d at 1363 (review-

ing the agency’s corrective action pursuant to a “highly

deferential” standard (internal quotation marks and

citation omitted)).

While the Appellees take issue with alleged anti-

competitiveness of the Army’s release of all offerors’

pricing in order to maintain fairness in the corrective

action rebidding, see Blue Tech’s Br. 28; Dell’s Br. 31–32;

Red River’s Br. 5, this does not alter our analysis. Here,

the relevant timeline of events lends itself to a unique

procedural posture. After the Army notified all offerors of

the award, it sent debriefing letters in February 2017 to

the unsuccessful offerors “in accordance with FAR

15.506.” J.A. 5949; see, e.g., J.A. 5948–49 (Debriefing

Letter to HPI). FAR 15.506 sets forth the required dead-

lines for “[p]ost[-]award debriefing of offerors” and pro-

vides that upon written request by any offeror “within 3

days after the date on which that offeror has received

notification of contract award,” see FAR 15.506(a)(1), an

agency must, within five days, see FAR 15.506(a)(2),

DELL FED. SYS., L.P. v. UNITED STATES 25

debrief said offerors as to, inter alia, the prices of the

“successful offeror,” FAR 15.506(d)(2); see FAR 15.506(d)

(outlining the “minimum” required post-award debriefing

information). However, in this case, a month later and

after protests were filed at the GAO, as discussed supra,

see Background Section III, the Army conceded that

procurement defects occurred, and it decided to proceed

with its corrective action to open discussions following

GAO approval, see J.A. 7021 (MFR dated March 22, 2017).

Then, on March 27, 2017, during the course of discussions

and “[a]s part of the . . . corrective action, the [Ar-

my] . . . decided to release all offerors’ total proposed

prices in an effort to remedy the potential competitive

advantage held by the offerors in the competition whose

prices were not disclosed.” J.A. 7378; see J.A. 7379–80

(listing total bid prices for all fifty-five offerors whose bids

were deemed responsive).

We find no binding authority preventing, on the facts

of this case, the release of the pricing information of all

offerors. Moreover, we find that the Government provides

a reasonable explanation for its actions. Under these

circumstances, the Government concluded it would, upon

rebidding, level the playing field for those successful

offerors who did not propose the lowest price and now

deserve a chance to revise their proposals to fairly com-

pete during the rebidding process. See Oral Arg. at 8:54–

9:51 (Q: “It seems that the Army . . . decided in fairness

that since [offerors] now have a target to shoot at––

namely, they now know what the awardee listed for

everything, so they know how to come in under it–– [did]

it seem[] only fair . . . to list everyone else’s [prices]?”

A: “Yes, your Honor . . . . In this case, . . . the initial

awardees, they were not the lowest priced offerors. So, if

the offerors who were not initially technically acceptable,

they get a chance to revise their proposals, the initial

awardees may likely be pushed out of the competition.”

Q: “When they did release all of the numbers that each

26 DELL FED. SYS., L.P. v. UNITED STATES

person gave in the proposal, did they strip [the] name[s] of

the proposer?” A: “That’s right your Honor.”). We find

this to be reasonable action in light of a defective pro-

curement, which the parties concede was defective. See

supra n.10; see also Oral Arg. at 29:57–30:07 (conceding,

by Dell’s counsel, that “[w]e won the procurement submit-

ting a technically acceptable offer, . . . [but] to a defective

procurement”).

The FAR explains that, when conducting discussions,

“[a]t a minimum, the [CO] must . . . indicate to, or discuss

with, each offeror still being considered for award, [inter

alia,] deficiencies” in the offeror’s proposal “to which the

offeror has not yet had an opportunity to respond.”

FAR 15.306(d)(3). The Army only proposes to allow an

offeror to “address deficiencies in [their] proposal” and

“make revisions to correct the deficiencies listed” by the

Army. J.A. 7097 (noting in letter opening discussions

with offeror that “[i]f you make changes to areas of your

technical proposal that have already been found accepta-

ble, you are at risk of being found technically unaccepta-

ble”). Given these reasonable limitations, the corrective

action has a rational basis.

Nevertheless, the Appellees maintain that clarifica-

tions are the only reasonable corrective action. See, e.g.,

Dell’s Br. 29, 31. However, requests for clarifications are

“limited exchanges,” designed to “clarify certain aspects of

proposals” or “resolve minor or clerical errors” in the

offerors’ proposals. FAR 15.306(a)(1)–(2). “Clarifications

are not to be used to cure proposal deficiencies or material

omissions, materially alter the technical or cost elements

of the proposal, or otherwise revise the proposal.” JWK

Int’l Corp. v. United States, 52 Fed. Cl. 650, 661 (2002)

(brackets and citation omitted), aff’d, 56 F. App’x 474

(Fed. Cir. 2003). As discussed above, the errors caused by

the ambiguities in the Equipment Submission Form were

material, rather than minor or clerical. The Court of

Federal Claims acknowledged as much when it stated

DELL FED. SYS., L.P. v. UNITED STATES 27

that while “many of the losing offerors in this procure-

ment made minor or clerical errors” allegedly capable of

correction through clarifications, Dell, 133 Fed. Cl. at 105,

there were offerors that made “more wide-reaching er-

rors” that were not capable of correction via clarification,

id. at 106. Thus, the Army rationally chose discussions,

rather than clarifications, for all offerors as the appropri-

ate corrective action to address these material errors,

especially due to the Solicitation’s requirement to include,

should the Army decide to open discussions, “all pro-

posals, to include small business proposals previously

removed for unacceptability.” See J.A. 1384; Alfa, 175

F.3d at 1368 (holding that an “agency is strictly bound by

[the] terms” of the standards set out in the solicitation). 12

12 The Appellees also contend that our precedent in

Systems Application counsels against reinstating the

Army’s selected corrective action because “post-award

corrective action that allows previously unsuccessful

offerors to revise their proposals after the awardee’s price

has been disclosed causes harm to the original awardees.”

Red River’s Br. 4–5 (citing Sys. Application & Techs., Inc.

v. United States, 691 F.3d 1374 (Fed. Cir. 2012)). Reli-

ance on Systems Application is improper here because

that case analyzed whether a protestor suffered an injury-

in-fact to have standing, see 691 F.3d at 1382–83, which is

not at issue here. And unlike in Systems Application, the

Court of Federal Claims here found the Army’s decision to

take corrective action (despite disagreeing with the pro-

posed corrective action) was justified due to likely violat-

ing a regulation. Dell, 133 Fed. Cl. at 103–04; see id. at

104 (“Therefore, it was rational for the MFR to find that

the Army’s failure to conduct discussions constituted a

procurement defect.”).

28 DELL FED. SYS., L.P. v. UNITED STATES

Finally, Appellees argue that the Army’s failure to

consider other “[m]ore [l]imited” corrective actions is

arbitrary and capricious. Dell’s Br. 33. The Army was

not legally required to address every option, but rather to

provide a reasonable corrective action and adequately

explain its reasoning for doing so. See Chapman, 490

F.3d at 938. The Army rationally decided to ameliorate a

defective solicitation by re-opening the procurement,

following the applicable regulation, and engaging in

discussions to award new contracts. Even if we agreed

with Appellees that the Army had other, better options

available, we nevertheless conclude that the option it

chose was reasonable, and we therefore refuse to “substi-

tute [our] judgment” for that of the Army by determining

whether there was another, perhaps preferable solution.

See R & W Flammann GmbH v. United States, 339 F.3d

1320, 1322 (Fed. Cir. 2003) (“[W]hen an officer[’]s decision

is reasonable a court may not substitute its judgment for

that of the agency.”).

Accordingly, we hold that the original corrective ac-

tion was rationally related to the procurement defect and

that the Court of Federal Claims abused its discretion in

finding that Appellees demonstrated, inter alia, success

on the merits. Because proving success on the merits is a

necessary element for a permanent injunction, 13 we

13 We may balance the remaining three Centech

permanent injunction factors—irreparable harm, balance

of hardships, and public interest—when deciding whether

to grant or deny injunctive relief; however, because we

find the Court of Federal Claims erred in finding that the

Appellees had “succeeded on the merits,” the great weight

we accord this factor as compared to the other three

precludes the possibility of an injunction. See Centech

Grp., 554 F.3d at 1037; see also Hallmark-Phoenix 3, LLC

DELL FED. SYS., L.P. v. UNITED STATES 29

reverse the Court of Federal Claims’ grant of an injunc-

tion. The Army may proceed with its proposed corrective

action, which we hereby reinstate.

CONCLUSION

We have considered the parties’ remaining arguments

and find them unpersuasive. Accordingly, the Judgment

of the U.S. Court of Federal Claims is

REVERSED

v. United States, 429 F. App’x 983, 984 (Fed. Cir. 2011);

Chrysler Motors Corp. v. Auto Body Panels of Ohio,

Inc., 908 F.2d 951, 953 (Fed. Cir. 1990) (“If the injunction

is denied, the absence of an adequate showing with regard

to any one factor may be sufficient, given the weight or

lack of it assigned the other factors, to justify the deni-

al.”). Moreover, we find that Appellees cannot meet their

burden to justify a permanent injunction even if the three

remaining permanent injunction factors balanced togeth-

er in equilibrium, and therefore reversal is appropriate

here because any alternative result on remand necessarily

would have been an abuse of discretion. Cf. Robert Bosch

LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011)

(weighing permanent injunction factors and reversing

instead of remanding a lower court’s decision to deny a

permanent injunction).