Aircraft Charter Solutions, Inc. v. United States

In the United States Court of Federal Claims

No. 13-9 C

(Filed March 8, 2013)1

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

AIRCRAFT CHARTER *

SOLUTIONS, INC., *

*

Plaintiff, *

*

v. * Post-Award Bid Protest;

* Cardinal Change Doctrine;

THE UNITED STATES, * Whether an Out-of-Scope

* Modification of the Awardee’s

Defendant, * Contract Occurred; Laches.

*

DYNCORP INTERNATIONAL LLC, *

*

Intervenor-Defendant. *

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

David T. Ralston, Jr., Washington, DC, for plaintiff. Frank S. Murray and

Steven C. Lambert, Washington, DC, of counsel.

Daniel Rabinowitz, United States Department of Justice, with whom were

Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E.

Davidson, Director, Steven J. Gillingham, Assistant Director, Washington, DC, for

defendant. Kathleen D. Martin, United States Department of State, Washington,

DC, of counsel.

1

/ This opinion was issued under seal on January 31, 2013. Pursuant to ¶ 8 of the

ordering language, the parties were invited to identify source selection, proprietary or

confidential material subject to deletion on the basis that the material was protected/privileged.

One such redaction was proposed. Brackets ([ ]) identify the redacted portion of this opinion.

David M. Nadler, Washington, DC, for intervenor-defendant. Scott Arnold

and Erin Wilcox Burns, of counsel.

________________________________

OPINION AND ORDER

________________________________

Bush, Judge.

Plaintiff Aircraft Charter Solutions, Inc. (ACS) filed its post-award bid

protest complaint and requests for injunctive relief on January 4, 2013. In its

complaint, plaintiff asserted that the Department of State (State) has effected an

out-of-scope modification of S-AQMPD-05-C-1103 (State Contract), a contract

awarded to DynCorp International LLC (DynCorp) in 2005. DynCorp has

intervened in this suit. In this protest, ACS asserts that State is currently ordering

“commercial air transportation of passengers and cargo within Afghanistan” from

DynCorp under the State Contract, Compl. ¶ 82, in violation of procurement law.

ACS asks that the court enjoin this conduct.

The procedural posture of this litigation has been something of a

fast-moving target, and requires a brief explanation. The complaint requested four

types of relief. The first three types of relief – a preliminary injunction, a

permanent injunction, and a declaratory judgment – were focused on preventing

DynCorp from providing State with air transportation, of a general nature, of

passengers and cargo in Afghanistan. See Compl. at 1, 31. The fourth type of

requested relief was the entry of an order directing the United States to instead

purchase such services, for a time, from ACS. Id. at 1-2, 31. The complaint was

also accompanied by two motions of relevance here: a motion for the entry of a

temporary restraining order (TRO) and a motion for the entry of a preliminary

injunction.

Plaintiff’s counsel, in the initial scheduling conference held by the court,

noted that after January 31, 2013, ACS would no longer have a valid contract with

the United States Agency for International Development (USAID) for air

passenger and cargo services in Afghanistan. Thus, counsel reasoned, the factors

to be considered for a TRO or a preliminary injunction would be fundamentally

2

altered after that date. The court inquired whether the government could maintain

the status quo by extending the USAID contract during the pendency of this

protest, but defendant’s counsel stated that the government would not do so. The

court noted that plaintiff’s TRO and preliminary injunction motions could not be

decided without briefing of the complex issues presented therein.

The court imposed an expedited briefing schedule utilizing cross-motions for

judgment of the administrative record to decide plaintiff’s requests for a TRO and

a preliminary injunction by January 31, 2013, the termination date of ACS’s

contract with USAID. The scheduling order permitted the parties to focus

primarily on plaintiff’s requests for a TRO and a preliminary injunction. See

Scheduling Order of Jan. 8, 2013, at 2-3. That order also denied plaintiff’s TRO

motion and its preliminary injunction motion as moot, noting that “plaintiff’s

motion for judgment on the administrative record will argue for a TRO and a

preliminary injunction.” Id.

The administrative record (AR) of this procurement was filed on January 10,

2013, and a minor correction to the AR was filed on January 14, 2013. In its

motion for judgment on the administrative record, plaintiff did not renew its

request for a TRO. With the passage of time, plaintiff also abandoned its request

that the court direct the United States to purchase air passenger and cargo services

in Afghanistan from ACS. See Oral Argument Recording (OA Rec.) at 1:13 PM.

Instead, plaintiff primarily seeks a preliminary injunction and a permanent

injunction of performance of a portion of the State Contract, and continues to press

for a declaratory judgment that an out-of-scope modification of the State Contract

occurred. Pl.’s Mot. at 1. The briefing submitted by plaintiff and by defendant

fully addresses plaintiff’s requests for preliminary and permanent injunctive relief,

as well as the merits of plaintiff’s request for a declaratory judgment. See Pl.’s

Mot. at 1-2, 57, 59-67; Def.’s Mot. at 1-2, 25-36; Pl.’s Reply at 30.

Thus, the record now before the court permits a resolution of the merits of

this protest and plaintiff’s requests for injunctive relief. Oral argument was held

on January 25, 2013. As discussed below, plaintiff has not prevailed on the merits

of its protest, and plaintiff has not shown that injunctive relief should issue.

Defendant’s and intervenor-defendant’s motions for judgment on the

administrative record are therefore granted, and plaintiff’s motion for judgment on

the administrative record is denied.

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BACKGROUND

I. The Solicitation

The solicitation for the State Contract was formally issued on December 9,

2003, as Solicitation No. S-LMAQM-03-R-0008 (Solicitation). AR at 1, 210;

Def.’s Mot. App. B ¶ 5. The contract services were categorized as “[p]rofessional,

administrative, and management support services,” with the title “[International

Narcotics and Law Enforcement Affairs (INL)] Counter-Narcotics Aviation

Support Services.” AR at 210. Because this protest focuses, in large part, on the

expectations of bidders responding to the Solicitation, the court reproduces here

the full description of the proposed contract that was provided in a synopsis posted

on the FedBizOpps website:

The U.S. Department of State Bureau for International

Narcotics and Law Enforcement Affairs, Office of

Aviation (INL/A) is soliciting offerors to provide

aviation support services. INL/A is primarily responsible

for supporting the U.S. Embassy Country Teams,

generally through the Narcotics Affairs Section (NAS) of

each embassy, in their effort to assist host nation

governments in the eradication and interdiction of illicit

crops such as marijuana, coca and opium poppy as

mandated in the Foreign Assistance Act. Secondary

missions include pipeline security, border patrol, and

other related activities. The missions are accomplished

via the use of fixed wing and rotary aircraft, and are

performed in overseas nations in an environment that at

times may be extremely hostile and somewhat austere.

These operations are currently performed in Colombia,

Bolivia, Peru, and Pakistan, and are anticipated in

Mexico and Afghanistan in the near future. The contract

will provide all necessary operations and support of this

INL/A mission for an initial transition period of up to six

months, and a performance period that could extend to 10

years provided the contractor meets performance

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incentives provided in the associated award term

provision. The anticipated annual contract value is

approximately $170M, but could vary greatly depending

upon how the mission evolves over the performance

period. Specific program objectives include: 1. Illicit

crop eradication: The contractor will be responsible for

both aerial eradication and support for host nation

manual eradication of illicit drug crops in designated

countries, as well as the interdiction of illicit drug

production and trafficking. The contractor will be wholly

responsible for aerial eradication, while providing

aviation services in support of host nation personnel for

the manual eradication and interdiction missions. 2.

Aircraft availability: The contractor will provide all

necessary logistics and maintenance services to ensure

that aircraft are available to perform the many varied

tasks as required by local U. S. Embassy Narcotics

Affairs Section (NAS) officials. The goal is to provide a

lean logistics support system that uses state-of-the-art

business practices and streamlined processes that

minimize infrastructure requirements in all fields of

operation. 3. Training: While host nation personnel

should be qualified to perform the required missions, the

contractor is responsible for identifying deficiencies and

working with the US Government and host nation

representatives to develop training programs to rectify

any shortfalls. The ultimate goal is to transition all

specified mission requirements to host nation personnel

at the earliest date possible. 4. Flexibility: Due to the

evolving nature of the mission, the contractor must be

able to react to changing conditions quickly, with

minimal impact to steady state operations. Contract

Objectives: All requirements of the Technical

Requirements Document must be met. The government

is interested in a best value approach that can provide all

necessary services efficiently and safely. While there are

inherent dangers in counter narcotics activities, every

5

effort should be made to ensure that operations are

conducted in accordance with proven industry and/or

government standards.

Id. The court reserves a detailed examination of relevant Solicitation terms for the

Analysis section of this opinion.

The Solicitation was amended several times, with technical updates and bid

submission deadline enlargements not relevant here. The security clearance

requirements for contractor personnel were revised. See AR at 212-13. State

announced plans to hold an “industry day with prospective aviation support service

contractors” and their insurers to address issues with the third-person liability

insurance requirements of the contract. Id. at 1634. Offers were due, per the final

Solicitation amendment, by January 11, 2005. Id. at 1642.

II. DynCorp’s State Contract

DynCorp was awarded the State Contract (S-AQMPD-05-C-1103) on May

6, 2005, which, including a six-month transition period, has a potential

performance period of ten and a half years. AR at 1643, 1705. The State Contract

does not differ significantly from the Solicitation.2 The foreign countries identified

as locations for the delivery of specific services under the contract, as of May 6,

2005, were Colombia, Peru, Bolivia and Pakistan. Id. at 1687-1701, 1704, 1706-

07. The court reserves further discussion of specific provisions of the State

Contract for the Analysis section of this opinion.

III. Contract Modifications Relevant to Services Rendered in Afghanistan

The State Contract was soon modified to include Afghanistan operations. In

Modification 012 (Mod 12), effective June 28, 2006, funding for the contract was

increased and “Afghanistan operations” were added to the contract schedule. AR

at 1841. These operations were labeled “Airlift support of INL Counter Drug

2

/ Plaintiff points to the Statement of Work (SOW) of the State Contract as reflecting an

interpretation of the Solicitation’s requirements by DynCorp and State which is necessarily not

identical to the Solicitation itself. Pl.’s Mot. at 15-16 & nn.5-6. In the court’s view, the terms of

the SOW noted by plaintiff are not indicative of substantial differences between the Solicitation

and the State Contract.

6

programs in Afghanistan.” Id. at 1845. This was to be a two-pronged effort,

according to the statement of work. On the one hand, DynCorp was to provide

helicopter support for opium poppy crop eradication efforts; on the other hand,

DynCorp was to perform “airlift” support of counter-narcotics programs and

“various programs of US national interest” in Afghanistan. Id.

The focus of this protest is on the modification of the State Contract to

include “airlift support of cargo and passenger movement throughout Afghanistan

7 days a week,” where these air transport services were no longer restricted to

counter-narcotics programs. AR at 1846. In 2006, State estimated that each month

in Afghanistan DynCorp would be moving 2000 passengers and 90,000 pounds of

cargo, on average. Id. at 1899. Mod 12 will be discussed in more detail in the

Analysis section of this opinion.

Other modifications of the State Contract which might be relevant here

include, for example, the addition of Guatemala operations, in 2006. AR at 1904-

07. In 2008, the contract added a DC-3 aircraft for DynCorp’s Afghanistan

operations. Id. at 1916-17. In 2009, an additional 286 passengers involved in the

training of Afghan police officers required airlift services, and these services were

added to the State Contract. Id. at 2170-72. In 2010, three more aircraft were

required for DynCorp’s Afghanistan operations, along with additional

infrastructure to support passenger operations. Id. Tabs 16-17. In 2011, eight

helicopters were added to the contract for DynCorp’s Afghanistan operations. AR

Tab 19. Also in 2011, the State Contract added Iraq operations, which included

medical evacuation operations using six specially-equipped aircraft provided by

State, id. at 1968, 1977-80, and “Diplomatic Security High Threat Protection”

services, id. at 1984-86.

Effective May 9, 2012, a new contract number (S-AQMMA-12-C-1103) was

assigned to the State Contract, due to the passage of time and accounting system

requirements. AR at 2120, 2134. Later in 2012, the State Contract funded

construction of changes to “Camp Alvarado,” a United States government facility

at the international airport in Kabul. Id. at 2135. Recently, in September 2012, the

State Contract was modified to add additional aircraft for DynCorp’s Afghanistan

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operations. Id. at 2169. The State Contract continues to be performed by

DynCorp, and may be extended into 2015 or 2016.3

IV. ACS’s USAID Contract

The United States Agency for International Development (USAID) and ACS

entered into a contract, 306-C-00-10-00510-00 (USAID Contract) on January 5,

2010. AR Tab 22. The USAID Contract is for “[a]ir passenger service and

aircraft/flight operations management” in Afghanistan. Id. at 1999. The base

period of the contract was from February 1, 2010 through January 31, 2012. Id. at

2004-05. The contract includes three option years, the first of which has been

exercised. Id. at 2009-11, 2108-09.

The USAID Contract has been modified many times, sometimes changing

the size or number of aircraft required for contract services. See, e.g., AR Tabs 23-

25, 28, 32-33. These modifications reflect changes in the management of

passenger services provided by the United States government in Afghanistan.

Other modifications to the USAID Contract similarly reflect changes in passenger

services provided by the United States government in Afghanistan. See, e.g., id. at

2100 (changing the name of air services referenced in the contract from “USAID

Air” to “Embassy Air,” and changing the contract requirements for passenger

ground transportation vehicles); id. at 2103-05 (changing the terminal for Embassy

Air at Kabul International Airport from “Ramp C” to “Camp Alvarado”). ACS

was informed on December 4, 2012 that the remaining two option years of its

contract, which might have prolonged the USAID Contract through January 31,

2015, would not be exercised by USAID. Pl.’s Mot. at 35. With less than a month

of performance remaining on its USAID Contract, ACS filed its bid protest in this

court on January 4, 2013.

DISCUSSION

I. Bid Protest Jurisdiction

3

/ Although, under the “Period of Performance” provision, it would appear that the State

Contract, including option years, expires no later than November 5, 2015, there is also a contract

provision, “Option to Extend Services,” which appears to permit services to continue six months

beyond that date. AR at 1705, 1740.

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This court “shall have jurisdiction 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) (2006). The jurisdictional grant is

“without regard to whether suit is instituted before or after the contract is

awarded.” Id. As a threshold jurisdictional matter, however, the plaintiff in a bid

protest must show that it has standing to bring the suit. Info. Tech. & Applications

Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003) (ITAC); Myers

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

2002) (citation omitted).

II. Standard of Review for Judgment on the Administrative Record

Rule 52.1(c) of the Rules of the United States Court of Federal Claims

(RCFC) provides for judgment on the administrative record. To review a motion,

or cross-motions, under RCFC 52.1(c), the court asks whether, given all the

disputed and undisputed facts, a party has met its burden of proof based on the

evidence in the record. Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57

(Fed. Cir. 2005) (Bannum II). The court must make factual findings where

necessary. Id. The resolution of RCFC 52.1(c) cross-motions is akin to an

expedited trial on the paper record. Id.

III. Bid Protest Review

The court first examines whether the plaintiff in a bid protest has standing to

bring the suit. ITAC, 316 F.3d at 1319. Standing arises from prejudice, which is

present if the plaintiff establishes that it is an interested party with a direct

economic interest in the procurement. Id. (citing Am. Fed’n of Gov’t Employees v.

United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) (AFGE)). Bid protest

standing is limited to those plaintiffs who are “‘actual or prospective bidders or

offerors whose direct economic interest would be affected by the award of the

contract or by the failure to award the contract.’” Weeks Marine, Inc. v. United

States, 575 F.3d 1352, 1359 (Fed. Cir. 2009) (quoting AFGE, 258 F.3d at 1302).

In the context of a post-award protest, the protestor must show that it has or had a

substantial chance of winning the contract requirement but for the errors in the

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procurement. See Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307-08 (Fed.

Cir. 2006) (citing Myers, 275 F.3d at 1369-70).

As the United States Court of Appeals for the Federal Circuit has stated, “the

proper standard to be applied in bid protest cases is provided by 5 U.S.C. §

706(2)(A) [(2006)]: 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.’” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350-51 (Fed. Cir.

2004) (citing Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-

58 (Fed. Cir. 2000)). Under this standard, a procurement decision may be set aside

if it lacked a rational basis or if the agency’s decision-making involved a clear and

prejudicial violation of statute, regulation or procedure. Emery Worldwide

Airlines, Inc. v. United States, 264 F.3d 1071, 1085-86 (Fed. Cir. 2001) (citing

Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,

1332-33 (Fed. Cir. 2001)). “The arbitrary and capricious standard applicable [in

bid protests] is highly deferential.” Advanced Data Concepts, 216 F.3d at 1058.

De minimis errors in the procurement process do not justify relief.

Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 1000 (Fed. Cir. 1996) (citing

Andersen Consulting v. United States, 959 F.2d 929, 932-33, 935 (Fed. Cir. 1992)).

The bid protest plaintiff bears the burden of proving that a significant error marred

the procurement in question. Id. (citing CACI Field Servs., Inc. v. United States,

854 F.2d 464, 466 (Fed. Cir. 1988)). Examples of arbitrary and capricious agency

action include “when the agency ‘entirely failed to consider an important aspect of

the problem, offered an explanation for its decision that runs counter to the

evidence before the agency, or [the decision] is so implausible that it could not be

ascribed to a difference in view or the product of agency expertise.’” Ala. Aircraft

Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009)

(quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,

43 (1983)) (alteration in original). The court will, however, “uphold a decision of

less than ideal clarity if the agency’s path may reasonably be discerned.” Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974)

(citation omitted).

“‘If the court finds a reasonable basis for the agency’s action, the court

should stay its hand even though it might, as an original proposition, have reached

a different conclusion as to the proper administration and application of the

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procurement regulations.’” Honeywell, Inc. v. United States, 870 F.2d 644, 648

(Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301

(D.C. Cir. 1971)). If, on the other hand, “the trial court determines [that] the

government acted without rational basis or contrary to law when evaluating the

bids and awarding the contract [requirement,] . . . it proceeds to determine, as a

factual matter, if the bid protester was prejudiced by that conduct.” Bannum II,

404 F.3d at 1351. Plaintiff again bears the burden of proof. Id. at 1358.

“Prejudice is a question of fact.” Id. at 1353 (citing Advanced Data Concepts, 216

F.3d at 1057).

IV. Standing

Only a plaintiff possessing a substantial chance of winning a contract for the

services that are the subject of its bid protest has standing before this court. Rex

Service, 448 F.3d at 1307-08. Although neither defendant nor DynCorp challenges

ACS’s standing to bring this protest, standing is a threshold inquiry that the court

must address. ITAC, 316 F.3d at 1319. Here, ACS is a contractor currently

providing air passenger service in Afghanistan. Should the court enjoin State from

purchasing certain airlift services from DynCorp because these are deemed to be

out-of-scope of the State Contract, ACS has a substantial chance of receiving a

contract for at least some of these airlift services in Afghanistan.4 For this reason,

ACS has standing to bring this bid protest.

V. Laches

The record shows that DynCorp has been providing airlift services in

Afghanistan since 2006. See AR Tab 9; Milstead Decl. ¶ 3. ACS, through an

affiliate, has been providing air transportation for USAID in Afghanistan since

4

/ The court acknowledges that there are alternatives to an award of a contract to ACS

should an injunction issue. State contemplates, for example, the award of a sole-source contract

to DynCorp, should the court grant any of plaintiff’s requests for injunctive relief. See Def.’s

Mot Ex. A ¶ 16. This contingency plan of the government, however, does not deny ACS

standing to bring this protest. In the court’s view, ACS has a greater than insubstantial chance of

obtaining a contract for passenger transport in Afghanistan if it prevails in this protest. See

ITAC, 316 F.3d at 1319 (holding that the plaintiff in that case had standing “because it had

greater than an insubstantial chance of securing the contract if successful on the merits of the bid

protest”).

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2004. Reid 1st Decl. ¶¶ 8-9. Although the record does not establish the earliest

date that ACS was aware that DynCorp was providing passenger service for State

in Afghanistan, there is no real debate that ACS has known for approximately three

years about DynCorp’s airlift services. See, e.g., OA Rec. at 1:22 PM, 1:35 PM-

1:40 PM; Reid 1st Decl. ¶¶ 12, 21; Pl.’s Reply at 4 n.1, 6-7; Def.’s Reply at 2-3.

As defendant notes, plaintiff has not explained why it waited three years to file this

protest.5 Defendant suggests, and the record confirms, that ACS waited until

USAID notified ACS on December 4, 2012 that the second option year available

under the USAID Contract would not be exercised, and then further delayed filing

this protest until January 4, 2013. This unreasonable delay, defendant argues,

constitutes laches and bars plaintiff’s bid protest.6 Def.’s Mot. at 9-15. The court

agrees.

This court does not frequently apply the doctrine of laches in the bid protest

context. See, e.g., CW Gov’t Travel, Inc. v. United States, 61 Fed. Cl. 559, 569

5

/ DynCorp, according to plaintiff’s own Embassy Air passenger load charts, already had

a substantial share in the passenger load of Embassy Air in Afghanistan by mid-2010. Pl.’s Ex.

6. A reasonable contractor could not have ignored this competition, and the potential for

pursuing relief through a bid protest action, as of June 2010. Thus, plaintiff has sat on its rights

for at least two and a half years. The court adopts three years, however, as an approximate

measure of the delay in the filing of this case, because Embassy Air services provided by

DynCorp are acknowledged by the parties to have begun, and to have been publicly known, no

later than 2009. See Def.’s Reply at 2-3; OA Rec. at 1:22 PM, 1:35 PM-1:40 PM.

6

/ Defendant has abandoned its argument that a bid protest filed in 2013 contesting the

legality of a contract modification issued in 2006 is barred by this court’s six-year statute of

limitations. Def.’s Reply at 2 n.1. Defendant’s abandonment of the statute of limitations issue

does not resolve the question, however. The court must determine its jurisdiction over a case

whenever it appears in doubt. E.g., Hambsch v. United States, 857 F.2d 763, 764-65 (Fed. Cir.

1988); Bayship Mgmt., Inc. v. United States, 43 Fed. Cl. 535, 536 (1999) (citations omitted).

Here, plaintiff bears the burden of establishing jurisdictional timeliness, and the burden of

establishing “accrual suspension” of its claim, by a preponderance of the evidence. See, e.g.,

Young v. United States, 529 F.3d 1380, 1384 (Fed. Cir. 2008) (citing Martinez v. United States,

333 F.3d 1295, 1319 (Fed. Cir. 2003); Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377

(Fed. Cir. 1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189

(1936)); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988) (citation

omitted). The expedited schedule of this protest, however, did not afford plaintiff the

opportunity to establish a record sufficient to prove or disprove accrual suspension; thus, on the

record currently before the court, and according all favorable inferences to the factual allegations

in plaintiff’s complaint, the court will not dismiss this case on statute of limitations grounds.

12

(2004) (CW Government) (stating that “we would be reluctant to invoke laches

except under extraordinary circumstances”). Plaintiffs’ bar recognizes, however,

that delay in filing a bid protest carries serious consequences. In some cases, delay

constitutes waiver by the plaintiff of a bid protest claim. See, e.g., Blue & Gold

Fleet, L.P. v. United States, 492 F.3d 1308, 1315 (Fed. Cir. 2007) (citing 28 U.S.C.

§ 1491(b)(3) (2006)). In others, delay by the plaintiff in filing a bid protest affects

the court’s weighing of injunctive relief factors. See, e.g., Elmendorf Support

Servs. Joint Venture v. United States, 105 Fed. Cl. 203, 212 (2012) (“Undue delay

is relevant in determining the extent to which it has magnified the harm to

defendant.”) (citations omitted). In a few cases, where delay is of an unacceptable

magnitude, the doctrine of laches may bar a bid protest. See, e.g., Reilly v. United

States, 104 Fed. Cl. 69, 78-80 (2012).

There is no doubt that the doctrine of laches may properly be invoked in the

bid protest context. Blue & Gold Fleet, 492 F.3d at 1314-15 (citing cases). There

is also no dispute that defendant, in this case, must demonstrate two elements to

establish laches: unreasonable delay on the part of the protestor and economic

prejudice to the government. See, e.g., Software Testing Solutions, Inc. v. United

States, 58 Fed. Cl. 533, 536 (2003) (citations omitted). In this case, although

plaintiff does not specifically concede unreasonable delay, plaintiff has wisely not

attempted to argue that a three-year delay in the filing of a bid protest is

reasonable.7 Pl.’s Reply at 3-4. The court finds that the government has met the

first prong of a successful laches defense. See CW Government, 61 Fed. Cl. at 569

(“In the context of a bid protest, 14 months is a lifetime.”).

Turning to the second prong of laches, that of economic prejudice, plaintiff

relies heavily, in its reply brief and at oral argument, on the fact that State may well

award a sole-source contract to DynCorp if an injunction of a portion of the State

Contract issues from this court (were plaintiff to prevail in this bid protest). Pl.’s

Reply at 5; OA Rec. at 2:08 PM. At oral argument, plaintiff expanded greatly on

its “no prejudice, thus no laches” construct, and made the following main points.8

7

/ Plaintiff’s arguments concerning the timeliness of its suit, Pl.’s Reply at 4 n.1, are

cursory and unpersuasive.

8

/ Plaintiff’s arguments regarding prejudice and laches which were first presented at oral

argument, and not earlier raised in its reply brief, have arguably been waived. See, e.g., Office

continue...

13

First, according to plaintiff, there is no delay-related prejudice to the United States,

because an earlier protest resulting in an injunction, in perhaps 2011 or 2012,

would have caused the same type and amount of economic prejudice as would a

protest and an injunction in 2013. OA Rec. at 1:59 PM. Second, State’s

investments in recent developments of DynCorp’s airlift support services would

not be lost, but could be transferred to an awardee in a new, competitive

procurement for these services. Id. at 2:00 PM-2:01 PM. Third, the type and

amount of injunction-related hardships the government might encounter go not to

laches, but to the balancing of the hardships prong of the factors to be considered

for injunctive relief. Id. at 2:06 PM. Finally, plaintiff contends that defendant’s

arguments that ACS has less capacity to fulfill the challenged portions of the State

Contract in 2013 than ACS would have had in previous years are vague and

unsubstantiated. Id. at 2:07 PM-2:08 PM.

Defendant, on the other hand, has pointed to specific, delay-related

economic prejudice that satisfies the second laches prong. For example, the

three-year delay in filing this protest parallels a three-year investment in

DynCorp’s airlift support services in Afghanistan – with additional planes

providing the clearest example of costs incurred by the government. Def.’s Mot. at

15. Defendant argues that such investments represent a “continual[] honing and

defining [of] the contours of Embassy Air.” Def.’s Reply at 4. At oral argument,

defendant asserted that it is costly and inefficient to now dismantle the last three

years of work devoted to the construction and maintenance of airlift support

services in Afghanistan using a specific contractor - DynCorp. OA Rec. at 2:31

PM-2:32 PM. The court must agree. It is not obvious to the court how a

competitive procurement, initiated three years later, could recover investments of

this nature and magnitude.

Furthermore, the administrative record strongly supports defendant’s

contention that State’s options for responding to a successful bid protest of

DynCorp’s airlift support services in Afghanistan are less attractive in 2013 than

8

/ ...continue

Depot, Inc. v. United States, 95 Fed. Cl. 517, 530-31 (2010) (“Because plaintiff’s argument was

not presented to the court until oral argument, the court considers this argument waived.”)

(citation omitted). However, given the rigorous exigencies of the expedited briefing schedule

necessitated by this bid protest, the court has considered all of the parties’ arguments, even those

presented for the first time at oral argument.

14

they would have been in 2009. Def.’s Mot. at 14. If, indeed, ACS could have

provided equivalent airlift support services in 2009, defendant could have removed

transport services from the State Contract (and from DynCorp), with less

disruption to essential services in Afghanistan and less disruption to its

management of existing contracts. Now, in January 2013, the government states

that changes in aviation security in Afghanistan reduce the availability of

alternatives to just one – a sole-source contract award to DynCorp. Id.; Milstead

Decl. ¶ 16. Although plaintiff argues that the security concerns of the government

regarding ACS are not substantiated, the court must credit the assessment of those

concerns presented by the declarant proffered by the government. In the court’s

view, the cost to the government of this eleventh-hour protest is greater than that of

an earlier, timely protest, where cheaper and less disruptive corrective action

would have been available.

The court finds that ACS unreasonably delayed its protest and that the

government was economically prejudiced as a result. Plaintiff’s bid protest is

barred by laches, and must be dismissed on these grounds. In the interests of

judicial economy, the court considers, in the alternative, the merits of plaintiff’s

protest, which alleges that a cardinal change of the State Contract occurred when

DynCorp began providing air passenger and cargo service in Afghanistan.

VI. The Cardinal Change Doctrine in the Bid Protest Context

A. Caselaw

The cardinal change doctrine was developed to discern whether

modifications to a government contract were severe enough to constitute a breach

of contract by the government. See, e.g., Allied Materials & Equip. Co. v. United

States, 569 F.2d 562, 563-64 (Ct. Cl. 1978) (citations omitted). A cardinal change

“occurs when the government effects an alteration in the work so drastic that it

effectively requires the contractor to perform duties materially different from those

originally bargained for.” Id. Another influential definition of the cardinal change

doctrine states that:

The basic standard, as the court has put it, is whether the

modified job was essentially the same work as the parties

bargained for when the contract was awarded. Plaintiff

15

has no right to complain if the project it ultimately

constructed was essentially the same as the one it

contracted to construct. Conversely, there is a cardinal

change if the ordered deviations altered the nature of the

thing to be constructed. Our opinions have cautioned

that the problem is a matter of degree varying from one

contract to another and can be resolved only by

considering the totality of the change and this requires

recourse to its magnitude as well as its quality. There is

no exact formula . . . . Each case must be analyzed on its

own facts and in light of its own circumstances, giving

just consideration to the magnitude and quality of the

changes ordered and their cumulative effect upon the

project as a whole. In emphasizing that there is no

mechanical or arithmetical answer, we have repeated that

[t]he number of changes is not, in and of itself, the test[.]

Air-A-Plane Corp. v. United States, 408 F.2d 1030, 1033 (Ct. Cl. 1969) (internal

quotations and citations omitted).

The cardinal change doctrine has found use in the bid protest context, as

well. In AT & T Communications, Inc. v. Wiltel, Inc., 1 F.3d 1201 (Fed. Cir. 1993)

(AT & T), the court explained how the cardinal change doctrine should be applied

when reviewing contract modifications to ensure that competition requirements are

met by a procuring agency:

This [bid protest] does not ask whether Government

modifications breached a contract, but asks instead

whether Government modifications changed the contract

enough to circumvent the statutory requirement of

competition. The cardinal change doctrine asks whether

a modification exceeds the scope of the contract’s

changes clause; this case asks whether the modification is

within the scope of the competition conducted to achieve

the original contract. In application, these questions

overlap. A modification generally falls within the scope

of the original procurement if potential bidders would

16

have expected it to fall within the contract’s changes

clause.

Id. at 1205 (citations omitted).

Perhaps the most common factual scenario that implicates the cardinal

change doctrine in bid protests occurs when a disappointed bidder learns of

changes in the awardee’s contract, and then attempts to invalidate the contract

modification on the grounds that the changed contract is not that which was

competed by the agency. See, e.g., AT & T, 1 F.3d at 1202-03 (services added to

awardee’s contract trigger protest by disappointed bidders alleging that contract

modifications are out of the scope of the original competitive procurement);

CWT/Alexander Travel, Ltd. v. United States, 78 Fed. Cl. 486, 493-94 (2007)

(delays in award and start dates of contract, as well as price increases, alleged to

constitute a cardinal change to the contract). Nevertheless, the basic analytical

framework of the cardinal change doctrine is the same whenever a protestor alleges

that competition has been frustrated by modifications to a contract, i.e., that the

procuring agency has impermissibly strayed from the scope of the contract

requirements that were advertised to offerors. Regardless of the procurement

scenario, the inquiry is fundamentally the same – “whether Government

modifications changed the contract [requirements] enough to circumvent the

statutory requirement of competition.” AT & T, 1 F.3d at 1205.

B. Statutory Framework

The Competition in Contracting Act (CICA) requires executive agencies,

when procuring property or services, to “obtain full and open competition through

the use of competitive procedures,” unless certain specified exceptions apply. 41

U.S.C.A § 3301(a)(1) (West 2011). It is this statutory imperative for full and open

competition that is violated if a procuring agency makes a cardinal change to a

contract requirement after accepting bids in response to a solicitation. See AT & T,

1 F.3d at 1205 (“[M]odifications outside the scope of the original competed

contract fall under the statutory competition requirement.”). In other words, a

cardinal change to a contract after the contract has been awarded disguises the

essential nature of the competed contract and frustrates full and open competition.

VII. Analysis of the Merits of ACS’s Protest

17

A. Evolving Missions Are Anticipated in the Solicitation

The court’s first task is to determine whether the scope of the Solicitation, as

described by the Solicitation’s terms and its Changes clause,9 would have led

bidders to expect that the Afghan airlift services disputed here could reasonably be

included within the State Contract. See AT & T, 1 F.3d at 1205 (“A modification

generally falls within the scope of the original procurement if potential bidders

would have expected it to fall within the contract’s changes clause.”). Plaintiff

advises that in solicitation interpretation, as in contract interpretation, the court

must give meaning to all of a solicitation’s terms. Pl.’s Mot. at 49-50. The court

agrees with plaintiff’s view of contract interpretation. Even more apt advice comes

from the Federal Circuit, however, which suggests that in bid protests alleging that

a cardinal change has occurred, the court must focus on the “the [challenged

contract] modification in the context of the contract as a whole.” AT & T, 1 F.3d at

1207. It is necessary, therefore, to begin with an analysis of the context of services

described in the Solicitation.

1. The Solicitation’s Context

Here, the Solicitation noted that contract services “are currently performed

in Colombia, Bolivia, Peru, and Pakistan, and are anticipated in Mexico and

Afghanistan in the near future.” AR at 104. The court observes, first, that there is

no limit to the number of countries that could be served, or to the specific countries

that could be served under the State Contract. Thus, unless each of the country-

specific tasks enumerated in the Solicitation are identical, a bidder would have

realized that services to be performed in newly-added countries might well be

different from those provided in Bolivia or Peru, for example.

Upon a close reading of the Solicitation, there are, as it happens, significant

differences in the types of services provided in Colombia or Pakistan, for example,

from those provided in Bolivia and Peru. Of particular interest here, in Colombia

the awardee would be responsible for “Air Assault/Aerial Transportation of

9

/ The Solicitation, and the resulting State Contract, contained both a fixed-price and a

cost-reimbursement Changes clause. AR at 58-59, 1737-38. For ease of reference, the court

refers to these clauses as the “Changes clause.”

18

Personnel and Cargo.” AR at 187. Two separate provisions of the Solicitation,

specific to Colombia in this regard, are relevant:

The Contractor routinely supports multiple-ship

helicopter air assault operations, which involves troop

transport helicopters and armed escort helicopters. The

Contractor shall maintain the capability to perform

special mission tasks to include but not limited to fast

rope and rappel operations. At least twice per month, the

Contractor will support air assault movement of one

counternarcotics battalion (up to 500 personnel strength)

and other units.

...

The Contractor will be required to transport cargo and

personnel to meet mission support requirements in

country. Currently, the average monthly movement is

1,500 passengers and 120,000 pounds of cargo. This

support is currently provided with the C-27 and

supplemented by leased aircraft.

Id. It would be reasonable to interpret the first cited provision as describing Air

Assault and the second cited provision as describing Aerial Transportation of

Personnel and Cargo; it is also reasonable to view or interpret these two provisions

as describing similar but not identical aviation support services under the State

Contract.10

The operations in Bolivia and Peru are not described as including Air

Assault services. Furthermore, in Bolivia, no country-specific provision is

included for Aerial Transportation of Personnel and Cargo. See AR at 194. In

Peru, the Aerial Transportation of Personnel and Cargo country-specific provision

states that

The Contractor will be required to transport an average of

30 passengers and up to 6000 pounds of cargo (or a

10

/ The court notes that the first provision describes helicopter missions and that the

second describes transport in a C-27 aircraft.

19

combination thereof) at least three times a week between

Lima [and contract performance locations].

Id. at 200. Because operations in Colombia, Bolivia and Peru all differ in the type

of Aerial Transportation of Personnel and Cargo services to be provided, a bidder

on the State Contract could not assume that aviation support services in a newly-

added country would be the same as those described in the Solicitation for these

three countries. In the court’s view, a bidder would have assumed that different

types of aviation support services could well be required under the contract in

Afghanistan.

The court turns its focus to Pakistan. The Solicitation includes a markedly

different description of missions to be performed in Pakistan, as opposed to the

missions described for the operations in Bolivia and Peru. Here are perhaps the

most relevant Pakistan-specific terms of the Solicitation, in the “Mission

Overview” description:

The Bureau for International Narcotics and Law

Enforcement Affairs, Office of Aviation (INL/A) is

primarily responsible to support the U.S Embassy

Country Team and NAS, Islamabad to assist the

Government of Pakistan (GOP) in the Border Security

Project. Under the auspices of the US Country Team, the

Narcotics Affairs Section (NAS) is primarily responsible

to assist host nation government to gain and maintain

control of the Pakistan-Afghanistan border through the

surveillance and interdiction of terrorists, narcotics, arms

and other unlawful cross-border activities. INL/A

supports this mission with the Huey IIs and C-208

Cessna Caravans.

AR at 203.

In Pakistan, the State Contract’s primary focus is to assist Pakistan “to gain

and maintain control of the Pakistan-Afghanistan border.” Id. In Bolivia, in

contrast, the “Mission Overview” states that:

20

The Bureau for International Narcotics and Law

Enforcement Affairs, Office of Aviation (INL/A) is

primarily responsible to support the U.S Embassy

Country Team and NAS, La Paz to assist the Government

of Bolivia (GOB) to curtail the supply of illegal drugs

from Bolivia to the United States. INL/A performs this

mission through the Bolivia Air Program in support of

the NAS.

Id. at 192. The operations in Bolivia differ in many respects from the operations in

Pakistan. Similarly, for Peru the “Mission Overview” states that the primary focus

of the State Contract will be the “curtailment of the supply of illegal drugs from

Peru into the United States.” Id. at 198. Reasonable bidders would assume from

these country-specific descriptions of contract services that the missions to be

accomplished in Afghanistan would differ from those in Bolivia and Peru, just as

the missions to be accomplished in Pakistan are different from those in Bolivia and

Peru.11

As the court reads the Solicitation, aviation support services in each country

served, and the country-specific primary and secondary missions of INL/A, would

differ. This context is crucial to the determination of the scope of the State

Contract. The court now turns to the parties’ dispute as to the scope of the

Solicitation.

2. The Solicitation’s Scope

Plaintiff and defendant fundamentally disagree as to the scope of the

Solicitation. To summarize plaintiff’s argument, five main points appear to

provide the foundation upon which plaintiff’s reading of the Solicitation rests.12

First, the Solicitation must be narrowly construed as seeking, at bottom, a counter-

11

/ This expectation of differing missions in Afghanistan is not only logical due to the

country-specific missions described in the Solicitation, but due to the unique role the United

States government was fulfilling in Afghanistan in 2003.

12

/ While plaintiff’s approach attacks the text of the Solicitation on many fronts, this

selection of five main points reflects, in the court’s view, plaintiff’s strongest arguments.

21

narcotics contractor for counter-narcotics missions.13 See, e.g., Pl.’s Mot. at 4 n.2

(suggesting that the primary and secondary missions noted in the Solicitation could

be referenced by the term “counternarcotics mission”); 46 (“The Counter-Narcotics

Solicitation was precisely that: a solicitation for aviation services in support of

designated counternarcotics missions.”). Second, all references in the Solicitation

to flexibility, additional tasks or evolving missions must be construed to include a

significant limitation – that all services added to the State Contract would

necessarily have a counter-narcotics focus. See id. at 49 (arguing that the

Solicitation’s reference to flexibility must be interpreted as stating that “flexibility

must be exercised within the confines of the Counternarcotics Solicitation and does

not authorize INL/A to acquire wholesale new airlift requirements materially

different from the services solicited in the original competion”); Pl.’s Reply at 9

(arguing that “broad-based air carriage of personnel or cargo . . . unrelated to

counternarcotics activities was beyond the scope of the contract’s counternarcotics

support mission”). Third, the Solicitation’s lack of a broad catch-all category of

services, or reference to any specific passenger-related services such as ticketing or

reservations, would have led offerors to assume that passenger service was beyond

the scope of the State Contract.14 Pl.’s Mot. at 47-48. Fourth, aerial transportation

of personnel and cargo, a category of services described in the Solicitation, cannot

be interpreted to include airlift services that do not have an emergency or military

nature, or that do not have a counter-narcotics purpose. Id.; Pl.’s Reply at 14-15.

Fifth, the Solicitation must be viewed as imbued with a strong nationalization

13

/ Plaintiff retreated somewhat from this position at oral argument. See OA Rec. at 1:27

PM-1:28 PM (acknowledging that the Solicitation contains more than just counter-narcotics

missions). Nonetheless, plaintiff insisted that the counter-narcotics “context” of the Solicitation

should color any interpretation of the Solicitation as a whole. Id. at 1:29 PM.

14

/ The court has also considered plaintiff’s other arguments parsing a multitude of terms

in the Solicitation, but finds these arguments insufficient to alter the court’s view of the scope of

that document. To cite just one example, plaintiff argues that no passenger aircraft suitable for

airlift services in Afghanistan were listed in the Solicitation. Pl.’s Mot. at 6, 55. Defendant

notes that the Solicitation’s terms allowed for the addition of aircraft (and new types of aircraft),

and that some aircraft listed in the Solicitation are indeed capable of passenger transport in

Afghanistan. See Def.’s Mot. at 23 (citing AR at 80, 169, 2005). Plaintiff’s reply brief did not

rebut defendant’s arguments in this regard. The court rejects plaintiff’s contention that its

analysis of specific terms in the Solicitation, “recounted in painstaking detail,” Pl.’s Reply at 15,

shows that the Solicitation’s scope did not include airlift support services of the type provided by

DynCorp in Afghanistan.

22

mission, where the contractor would provide training to host country nationals in

furtherance of achieving a transition to counter-narcotic aviation support services

being provided by the host countries and not by the United States. Pl.’s Mot. at 51-

52; Pl.’s Reply at 9-10, 14. Because DynCorp’s performance of airlift services in

Afghanistan includes no training component, plaintiff argues, these services must

be beyond the expectations of offerors responding to a Solicitation characterized

by a strong nationalization mission. Pl.’s Mot. at 51-52.

Defendant, on the other hand, views the Solicitation as denoting a

procurement for a broad range of aviation support services. Defendant points to

language listing a multitude of services to be provided under the State Contract,

such as this introductory statement of technical requirements:

This document provides the technical requirements for

the Bureau for International Narcotics and Law

Enforcement Affairs, Office of Aviation (INL/A)

Contractor Logistical Support (CLS) services for

eradication and interdiction of illicit drugs, training of

Contractor and host nation personnel, movement of

personnel and equipment, reconnaissance, search and

rescue, medical evacuation and ferrying of aircraft.

AR at 168. The government also points to terms of the Solicitation that are

expansive and broad, rather than narrow and specific. See Def.’s Mot. at 19.

Finally, defendant argues that the mention of “‘extremely hostile’” and “‘very

austere’” conditions in the Solicitation would have led offerors to presume that

contract missions would evolve as conditions required. Id. at 20 (quoting AR at

168).

Although both plaintiff’s and defendant’s positions reflect, at times,

somewhat extreme interpretations of the Solicitation,15 the court cannot disagree

15

/ Plaintiff’s efforts to extract meaning from Solicitation terms are, in some instances,

strained. The grouping of Air Assault and Aerial Transportation of Personnel and Cargo in one

paragraph of the Solicitation, for example, does not necessarily evince a “linkage” of the type

posited by ACS. See Pl.’s Mot. at 48 (citing AR at 171); see also Pl.’s Reply at 15 & n.10.

Defendant, for its part, appears to find remarkable breadth in the Solicitation’s description of

continue...

23

with the government’s ultimate conclusion that aerial transportation of passengers

and cargo, at least in the context of protecting the interests of the United States in

Afghanistan, is within the scope of the Solicitation. First, as noted supra, different

types of aerial transportation are required in the country-specific portions of the

Solicitation, and different missions are required to be accomplished in different

nations. Second, there is enough flexibility in the Solicitation’s terms to support

aerial transportation of passengers and cargo in hostile environments. See, e.g.,

AR at 166 (“Secondary missions include pipeline security, border patrol, and other

related activities.”); id. (“The anticipated annual contract value is approximately

$170M, but could vary greatly depending upon how the mission evolves over the

performance period.”); id. at 167 (“Flexibility: Due to the evolving nature of the

mission, the contractor must be able to react to changing conditions quickly, with

minimal impact to steady state operations.”); id. at 169 (“The Department of State

anticipates expansion of the program, to include other aircraft types and or

quantity, and additional missions (counter-narcotics and expanded authorities) into

other countries.”). Third, the court finds that the provisions in the Solicitation

governing Aerial Transportation of Personnel and Cargo, alongside reference to

other operations of considerable variety, provide notice to reasonable offerors that

airlift support services in Afghanistan are contemplated under the terms and the

Changes clause of the Solicitation.

Plaintiff argues that “references” to the Aerial Transportation category of

services in the Solicitation are determinative of the expectations of offerors as to

airlift support services:

The issue before the Court, then, is whether the

references in the Counternarcotics Solicitation to “aerial

transportation of personnel and cargo” would have

sufficiently alerted prospective offerors to the possibility

that the government would use the resulting contract as a

vehicle to obtain from its counternarcotics contractor

full-scale commercial-equivalent passenger and cargo

services, including an online ticketing/reservation

15

/ ...continue

“VIP missions.” Def.’s Mot. at 20, 24. The court is not persuaded by these zealous attempts to

find textual support for the parties’ positions where there is little or none to be found.

24

system, under which the contractor would serve all the

in-country air transportation needs of diplomacy and

development personnel, regardless of any connection to

the specific counternarcotics missions identified in the

Solicitation.

Pl.’s Reply at 14 (emphasis removed). The court does not agree with plaintiff’s

framing of the decisive issue for the merits of this protest. It is the Solicitation as a

whole, and especially the comparison of the context of the Solicitation with the

contract modification challenged here, that must be weighed by the court. See AT

& T, 1 F.3d at 1207. The Solicitation, aside from its important references to Aerial

Transportation of Personnel and Cargo, exhibited variety in the description of the

operations in Colombia, Bolivia, Peru, and Pakistan, and significant references to

flexibility and anticipated changes. Thus, although the Aerial Transportation

category of services is indeed important in the court’s analysis, the court must

construe the Solicitation as a whole.

The court has reviewed the relevant sections of the Solicitation and cannot

agree with plaintiff that secure air transportation of passengers and cargo, in the

hostile and austere conditions found in countries such as Afghanistan, was not

included within the Solicitation’s scope. The Technical Requirements Document

(TRD) describes “Aerial Transportation of Personnel and Cargo,” in relevant part,

in this manner:

Aerial transportation is defined as the movement of

personnel and cargo via rotary and/or fixed wing

aircraft. . . . The Contractor shall provide mission

capable aircraft and mission qualified crews to perform

the transportation mission.

AR at 171. Other operations, or missions,16 include search and rescue, medical

evacuations, and VIP missions. AR at 171-72. As an introduction to these

operations, the Solicitation states that

16

/ These terms are used interchangeably in this section of the Solicitation. See AR at

170 ¶ 3.3.

25

[t]he types of missions the Contractor will be required to

perform are listed below. We anticipate that mission

profiles may change and the Contractor shall be capable

of adapting to these changes.

AR at 170. The court has considered: (1) the performance period of more than ten

years for the State Contract; (2) the types of operations specified in the TRD; (3)

the variety of missions described in the Solicitation; (4) the differences in the

country-specific portions of the Solicitation; (5) the multiple and prominent

references to flexibility, adaptation and change; and, (6) the unique challenges of

protecting the interests of the United States in Afghanistan. In view of the context

of the State Contract set forth in the Solicitation, the court finds that a reasonable

offeror would have anticipated that in a country such as Afghanistan, secure air

transportation of passengers and cargo would be within the scope of the State

Contract.

There has been, therefore, no cardinal change effected by the addition of

airlift support services in Afghanistan to the State Contract.17 Thus, even if

plaintiff’s bid protest were not barred by laches, the protest filed by ACS has not

succeeded on the merits. Because plaintiff has not shown that a cardinal change of

the State Contract occurred, the court need not consider whether ACS was

prejudiced by Mod 12 and the addition of airlift support services in Afghanistan to

the State Contract. See Bannum II, 404 F.3d at 1351 (stating that the prejudice

inquiry is triggered by the plaintiff’s success on the merits of its protest).

VIII. Injunctive Relief Factors Weighed

Although the court has dismissed this protest as barred by the doctrine of

laches, and has found that plaintiff has not succeeded on the merits of its bid

17

/ In reaching this conclusion, the court does not ignore plaintiff’s reference to a

document which contains a statement that the State Contract’s scope has grown and changed

over the years. See Pl.’s Mot. at 1, 45-46. This document is not within the administrative

record, as discussed infra. Even if it were in the record, the court considers the document

irrelevant to the court’s analysis of the Solicitation and the changes effected by Mod 12.

Because Mod 12 is a permissible change under the Changes clause of both the Solicitation and

the State Contract, a statement regarding the “scope” of the State Contract cannot determine the

outcome of this suit.

26

protest, the court nonetheless examines plaintiff’s requests for preliminary and

permanent injunctive relief, again for the sake of judicial economy.

The factors to consider before issuing a permanent injunction are:

(1) whether, as it must, the plaintiff has succeeded on the

merits of the case; (2) whether the plaintiff will suffer

irreparable harm if the court withholds injunctive relief;

(3) whether the balance of hardships to the respective

parties favors the grant of injunctive relief; and (4)

whether it is in the public interest to grant injunctive

relief.

PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (citing

Amoco Prod. Co. v. Vill. of Gambell, Alaska, 480 U.S. 531, 546 n.12 (1987)). For

a preliminary injunction, plaintiff would have to show a likelihood of success on

the merits, but the other factors remain the same. Id.

A. Success on the Merits

Here, plaintiff has not succeeded on the merits, so the first factor weighs

against any injunctive remedy. Indeed, this court has stated that without success

on the merits, the injunctive relief inquiry is over. See, e.g., Sci. Applications Int’l

Corp. v. United States, No. 11-690C, 2012 WL 5869366, at *49 (Fed. Cl. Nov. 19,

2012) (“In that [the protestor] has not prevailed on the merits of its substantive

claims, the first hurdle prerequisite to injunctive relief, inquiry is over.”); Linc

Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 700 (2010) (“After all, success

on the merits is a condition precedent to granting a permanent injunction.”).

Nonetheless, the court will briefly discuss the other injunctive relief factors as they

apply to plaintiff’s requests for relief in this bid protest.

B. Irreparable Harm

The types of economic harm described by ACS, should an injunction not

issue, would normally constitute irreparable harm, in the court’s view. Plaintiff

asserts that ACS would suffer loss of revenues, both from the loss of opportunity to

compete for the airlift support services in Afghanistan, and from earnings that

27

might be available under its USAID Contract if extended, of approximately $[ ] in

2013, or [ ]% of its annual gross income. Pl.’s Reply at 22. Plaintiff also argues

that non-monetary losses, flowing from its withdrawal from Afghanistan and lay-

offs of personnel, would be irreparable, as well. Pl.’s Mot. at 60. The court must

consider, however, whether plaintiff’s allegedly irreparable economic harms are

fully incidental to the purported procurement violation that is the focus of this bid

protest. They are not.

When significant delay in bringing a protest has contributed to the

irreparable nature of the injuries alleged by the plaintiff, any self-inflicted harm

should not be considered irreparable for purposes of the injunctive relief analysis.

See GEO Grp., Inc. v. United States, 100 Fed. Cl. 223, 229 (2011) (GEO Group)

(noting that it is not this court’s role to rescue protestors from their “own ill-fated

tactical decisions”) (citations omitted). The imminent loss of ACS personnel at the

end of this month, or soon thereafter,18 is largely due to ACS’s decision to delay its

protest until January 2013. As to ACS’s economic losses, these, too, might have

been less substantial in 2009 or 2010. Although ACS has made a credible case for

at least some irreparable economic harm not of its own making, the court finds that

this factor weighs only slightly in plaintiff’s favor.

C. Balance of Hardships

As to the balance of the hardships, the court weighs the economic and non-

economic harms to ACS, should an injunction not issue, against the hardships that

would be inflicted on the government were the court to enjoin DynCorp’s

performance of airlift support services in Afghanistan under the State Contract.

The harms to ACS have been described, above, and some of the hardships that

would affect the government have been alluded to, indirectly, in the laches

discussion in this opinion. Plaintiff, both in its briefs and at oral argument, has

suggested that there are a number of creative ways that the government can reduce

the hardships flowing from an injunction, so that no hardships are experienced by

the government. Perhaps the most intriguing of these suggestions, and there are

many, is that DynCorp could continue to perform air passenger service in

Afghanistan as a subcontractor to ACS. OA Rec. at 1:21 PM. More generally,

18

/ The termination date of ACS’s performance under the USAID Contract may be

extended, according to plaintiff. See Reid 2d Decl. ¶ 11.

28

plaintiff insists that ACS can perform the required airlift support services as an

alternative to DynCorp. Finally, plaintiff notes that State has indicated that it

would resort to a sole-source contract with DynCorp, in the event of an injunction,

to prevent an unacceptable interruption of essential services; ACS argues that this

option eliminates any potential hardship to the United States. OA Rec. at 2:17 PM.

The government’s primary argument in this regard is that ACS is not an

acceptable alternative to DynCorp, under the security challenges in Afghanistan at

this point in time and going forward, and that an injunction will cause significant

hardship to the government. Def.’s Mot. at 32-35; Def.’s Reply at 13-15. The

court credits the record evidence which supports defendant’s arguments regarding

the need for DynCorp, rather than ACS, to continue as the provider of airlift

support services in Afghanistan. The court also agrees with the government that an

injunction will cause greater hardship to the government than the hardships posited

by plaintiff in the absence of an injunction. As noted earlier in this opinion, a

court-imposed dissolution of the Embassy Air model of services, built by State and

DynCorp over the last six years, would necessarily entail economic, programmatic

and administrative hardships of significant magnitude.

The court is not persuaded by plaintiff that a potential decision by State to

offer a sole-source contract to DynCorp, in the event of an injunction, tips the

balance of hardships in plaintiff’s favor. This court has repeatedly held that a

protestor’s delay in bringing a protest must be accounted for in the balance of

hardships inquiry. See, e.g., GEO Group, 100 Fed. Cl. at 230 (weighing the

protestor’s decision to delay filing its protest in this court in the balance of

hardships inquiry); Elmendorf, 105 Fed. Cl. at 210 (noting that “[e]quity aids the

vigilant, not those who slumber on their rights,” in a case where the protestor

waited until “28 days before the end of [its] last option extension to file its

complaint”); Bannum, Inc. v. United States, 60 Fed. Cl. 718, 731 (2004) (stating

that “a bid protest pressed well into contract performance tips the scale [weighing

injunctive relief factors] in favor of the awardee” (citing Gull Airborne

Instruments, Inc. v. Weinberger, 694 F.2d 838, 846 n.9 (D.C. Cir. 1982))), aff’d,

404 F.3d 1346 (Fed. Cir. 2005). In these circumstances, the balance of hardships

weighs in the government’s favor.19

19

/ The court notes that a sole-source contract award to DynCorp is not cost-free: the

continue...

29

D. Public Interest

Finally, plaintiff and defendant disagree as to whether or not the public

interest would be served by an injunction, in these circumstances. Plaintiff invokes

the benefits to the public interest when full and open competition prevails. Pl.’s

Mot. at 65-66; see also id. at 64 (stating that “the public interest in protecting the

integrity of the procurement system easily trumps national security in the present

case”). Defendant suggests that the public interest is served, in this case, by the

court’s abstention from judicial interference in the contracting function. Def.’s

Mot. at 35. Here, since there has been no violation of procurement law, the public

interest is best served by withholding the injunctive relief requested by plaintiff.

The court notes, too, that defendant has invoked national security concerns

in Afghanistan. By statute, the court must give due consideration to these

concerns. 28 U.S.C. § 1491(b)(3). In the case of secure aerial transportation of

passengers and cargo in Afghanistan, the national security concerns expressed in

the Milstead declaration are compelling. See Milstead Decl. ¶¶ 4-16. This court

often takes national security concerns into consideration as it weighs the public

interest injunctive relief factor. See, e.g., Elmendorf, 105 Fed. Cl. at 212; Def.

Tech., Inc. v. United States, 99 Fed. Cl. 103, 131 (2011); RhinoCorps Ltd. v.

United States, 87 Fed. Cl. 261, 281 (2009). Here, the public interest in national

security weighs against a court intervention in the airlift support services provided

by DynCorps in Afghanistan.

Weighing all four injunctive relief factors, the court finds that these factors

do not favor granting plaintiff a preliminary or a permanent injunction.

19

/ ...continue

procedure is encumbered with administrative burdens; a sole-source award may trigger, as

plaintiff notes, protests in this forum, or at the Government Accountability Office; in addition, a

sole-source award protest carries with it the risk of forum-imposed delays which could affect

contract performance in Afghanistan. The court would be remiss in its duty to consider the

national security concerns raised by defendant, Def.’s Mot. at 34-35; Def.’s Reply at 13-15; OA

Rec. at 2:58 PM, if it did not consider the hardships that would accompany a sole-source award

to DynCorp. The court therefore finds that, for this additional reason, the hardships to the

government, if an injunction should issue, outweigh the hardships identified by plaintiff, if the

court should stay its hand.

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IX. Motions to Supplement the Record

A. Axiom

In Axiom Resource Management, Inc. v. United States, 564 F.3d 1374 (Fed.

Cir. 2009), the Federal Circuit identified the acceptable circumstances under which

the administrative record may be supplemented in a bid protest. The Axiom panel

criticized a decision by this court which permitted supplementation of the

administrative record in a bid protest, and criticized the trial court’s over-broad

reliance on Esch v. Yeutter, 876 F.2d 976, 991 (D.C. Cir. 1989), a case which

provides a list of justifications for the supplementation of the administrative record

of an agency action. Axiom, 564 F.3d at 1379-81.

The court notes that the Axiom panel adopted a restrictive standard for

supplementation of the administrative record in a bid protest, and favorably cited

Murakami v. United States, 46 Fed. Cl. 731 (2000), aff’d, 398 F.3d 1342 (Fed. Cir.

2005). Axiom, 564 F.3d at 1380. The Axiom standard for supplementation of the

administrative record in a bid protest is a direct quotation from Murakami, stating

that “supplementation of the record should be limited to cases in which ‘the

omission of extra-record evidence precludes effective judicial review.’” Id.

(quoting Murakami, 46 Fed. Cl. at 735). The Federal Circuit relied on the cases

cited by this court in Murakami to conclude that “[t]he purpose of limiting review

to the record actually before the agency is to guard against courts using new

evidence to ‘convert the “arbitrary and capricious” standard into effectively de

novo review.’” Id. (quoting Murakami, 46 Fed. Cl. at 735 and citing Fla. Power &

Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985); Camp v. Pitts, 411 U.S. 138,

142 (1973)). The thrust of the Axiom decision, and Murakami, is that this court

must exercise restraint when considering whether or not to supplement the

administrative record in a bid protest. See id. (favoring a “more restrictive

approach” and questioning the vitality of Esch) (citations omitted); Murakami, 46

Fed. Cl. at 735 (stating that the construction of the Esch justifications for allowing

supplementation of an administrative record should be “extremely limited”)

(citations omitted). For these reasons, this court has carefully considered each

document proffered by the parties as a potential supplement to the administrative

record.

31

B. Documents Proffered by the Parties for Consideration by the

Court

The court acknowledges that there is some confusion as to the term

“administrative record.” Sometimes such a term denotes only the

contemporaneous record of agency decision-making that is reviewed by the court

under a deferential standard. See, e.g, Axiom, 564 F.3d at 1380 (“The purpose of

limiting review to the [contemporaneous] record actually before the agency is to

guard against courts using new evidence to ‘convert the “arbitrary and capricious”

standard into effectively de novo review.’”) (citation omitted). At other times, the

term “administrative record” is meant to include not only those contemporaneous

documents, but also records of subsequent protest-related events. See RCFC App.

C ¶ 22(s), (u). “Administrative record” might also broadly refer to all of the

documents relied upon by the court, once an administrative record has been filed

and appropriately supplemented, in granting a motion for judgment on the

administrative record. See, e.g., RhinoCorps, 87 Fed. Cl. at 273 n.13 (noting that

declarations proffered by the agency and the protestor often must be permitted to

supplement the administrative record to afford effective judicial review of national

security and national defense issues, as well as the weighing of injunctive relief

factors). It is this broader definition that the court has used in the supplementation

disputes discussed here. The court has applied the principles of Axiom to establish

a record required for the effective review of both the merits of this protest, as well

as plaintiff’s requests for injunctive relief and defendant’s laches defense.

To the extent that the briefing of plaintiff’s three motions regarding the

content of the administrative record may have proceeded under a different

definition, or definitions, of the term “administrative record,” the parties’ positions

on each proffered document are nonetheless clear. The court has carefully

considered any request that the court consider and rely on a particular document

that was not filed by defendant on January 10, 2013 as a component part of the

administrative record. Any document that, pursuant to the instant opinion and

order, now supplements the administrative record originally filed on January 10,

2013, is part of the administrative record because that document was deemed

necessary to the court’s effective review of this bid protest.

On plaintiff’s side, there were three motions to supplement or expand the

administrative record: Plaintiff’s Motion to Compel Agency to Complete the

32

Administrative Record and for Additional Remedial Action, filed January 11,

2013; Plaintiff’s Motion to Supplement the Administrative Record, filed January

15, 2013; and, Plaintiff’s Second Motion to Supplement the Administrative

Record, filed January 22, 2013.20 Of particular note are two declarations of Mr.

Robin Reid, Chairman of ACS. Mr. Reid’s first declaration is Plaintiff’s Exhibit 1

(Reid 1st Decl.), filed January 15, 2013. Mr. Reid’s second declaration is

Plaintiff’s Exhibit 7 (Reid 2d Decl.), filed January 22, 2013. Plaintiff also sought

the supplementation of the record with certain State Contract documents not

included in the administrative record filed January 10, 2013, as well as other

documents which, in plaintiff’s view, provide insights into the disputes in this case.

On defendant’s side, there were two declarations filed on January 18, 2013

as appendices to defendant’s motion for judgment on the administrative record.

The first is a declaration by Mr. Eric N. Milstead, an administrator at the U.S.

Embassy in Kabul. Def.’s Mot. App. A (Milstead Decl.). The second is a

declaration of the contracting officer for the State Contract, Mr. Patrick J. Murphy.

Def.’s Mot. App. B (Murphy Decl.). Defendant did not oppose three of plaintiff’s

requests for record supplementation as to State Contract documents that were

either inadvertently omitted from, or mistakenly included in, the administrative

record.

C. Proper Supplements to the Administrative Record

Three of the declarations submitted by plaintiff and defendant, the Reid and

Milstead declarations, bear on the injunctive relief factors weighed by the court, as

well as defendant’s laches defense. The Murphy declaration presents the history of

modifications to the State Contract, and goes to the cardinal change issue. These

declarations are necessary for effective judicial review, and properly supplement

the administrative record.

As to one of the uncontested contract documents proposed as a supplement,

AR Tab 37 properly substitutes a final contract modification for a draft

modification, AR Tab 14, and is now incorporated into the administrative record

through the filing of a Corrected Administrative Record on January 14, 2013.

20

/ Plaintiff’s later motions to supplement the record have rendered its motion filed

January 11, 2013 moot. See OA Rec. at 2:19 PM-2:21 PM.

33

Similarly, Plaintiff’s Exhibit 2 and Exhibit 3, uncontested by defendant, are State

Contract documents which are relevant to the cardinal change issue, and these

exhibits properly supplement the administrative record. Over defendant’s

objections, the court also permits supplementation of the record with plaintiff’s

Embassy Air Passenger Load chart, Pl.’s Ex. 6, which provides a graphic display

of the competition of ACS and DynCorp, from May 2010 to December 2012, for

Embassy Air passengers in Afghanistan. This chart goes to the cardinal change

issue, the laches issue, as well as the weighing of the injunctive relief factors, and

has been deemed by the court to be helpful to its judicial review of this protest.

D. Improper Supplements to the Administrative Record

All other documents submitted and proposed by plaintiff, Pl.’s Exs. 4-5,

8-13, must be rejected as improper supplements to the administrative record. The

court found nothing in these documents which advanced the court’s analysis of the

cardinal change issue. As to the email correspondence proposed by plaintiff as a

supplement to the administrative record, Pl.’s Exs. 9-10, these two emails are not

contract administration documents that would shed light on changes in the State

Contract. Although plaintiff urged the court to rely on Plaintiff’s Exhibit 10 for the

weighing of the injunctive relief factors, Pl.’s Reply at 25-27, the court relied,

instead, on sworn declarations of obvious weight rather than on emails of dubious

relevance.

E. “Table 3-2” and the Security Clearance Issue

The only other substantive dispute over a document not included in the

administrative record concerns what plaintiff refers to as “Table 3-2 to the [State]

Contract.” See Pl.’s Compel Mot. Att. A ¶ 6; see also Pl.’s Consolidated

Supplementation Reply at 7; OA Rec. at 2:12 PM-2:14 PM, 2:19 PM. This

document is cited in the State Contract as “Job Qualifications Table 3-2 (Appendix

1),” and is identified as a reference document providing information regarding

contractor personnel “security clearance requirements.” See Pl.’s Ex. 3 at 46.

Plaintiff’s position is that this document would have shed light on the security

clearances required of DynCorp staff providing airlift support services in

Afghanistan, and would have shed light on the dispute between the parties over the

ability of ACS to perform airlift support services in Afghanistan. Defendant’s

position is that the Table 3-2 was never incorporated into the contract by

34

modification, and thus, Table 3-2 is irrelevant to the cardinal change issue. Def.’s

1st Supplementation Resp. at 6. The court agrees with defendant that Table 3-2

would not have aided the court’s review of the cardinal change issue.

It is a closer question, however, whether the security clearance issue, as that

issue might contribute to the weighing of the four injunctive relief factors and the

government’s laches defense, would have been better understood by the court if

Table 3-2 were in the record. The government argues that the Milstead declaration

is authoritative on the security clearance issue, and that the assertions contained

therein certainly outweigh the assertions in the second Reid declaration.21 Def.’s

Reply at 15 & n.4; OA Rec. at 3:00 PM. Plaintiff asserts that the security clearance

issue is not clearly addressed in the record, and that Table 3-2 “would be virtually

controlling” on the security clearance issue. OA Rec. at 1:21 PM, 2:14 PM.

The court believes that the security clearance issue is adequately presented

in the parties’ declarations and the contract documents themselves. There is an

obvious difference between the discussion of security clearances in the State

Contract and the minimal discussion of security clearances in the USAID Contract.

See AR at 1682, 2027-28, 2086-87; Pl.’s Ex. 3 at 46. Given the marked differences

between the security clearance requirements in the two contracts, the record

contains enough information, once the declarations proffered by the parties have

been considered, to resolve the parties’ dispute as to ACS’s readiness to obtain

security clearances to replace DynCorp as the airlift support services contractor in

Afghanistan. The Milstead and Reid declarations, which necessarily rely on

contract requirements regarding security clearances and on direct knowledge of

conditions in Afghanistan, fully explore the security clearance issue; the absence of

Table 3-2 does not frustrate effective judicial review of this issue.22

21

/ The court must agree. Compare Milstead Decl. ¶¶ 7-10, 13, 16 with Reid 2d Decl.

¶¶ 36-38. The court notes that even if Plaintiff’s Exhibit 10, an email which mentions security

clearances, were permitted to supplement the administrative record, the declaration of Mr.

Milstead, whose “duties include administrative oversight of aviation operations in support of the

Embassy’s missions” in Afghanistan, Milstead Decl. ¶ 1, would still be more persuasive on the

security clearance issue.

22

/ The court rejects plaintiff’s request, presented for the first time at oral argument, that

the court draw an adverse inference from the government’s refusal to include Table 3-2 in the

administrative record. OA Rec. at 2:14 PM-2:15 PM. As stated supra, the court does not agree

continue...

35

CONCLUSION

This bid protest is dismissed due to laches on the part of plaintiff. In the

alternative, this protest is dismissed because there was no out-of-scope

modification of the State Contract in the provision of airlift support services by

DynCorp in Afghanistan. The court has also examined the four factors required for

an injunction to issue, and finds that these factors do not weigh in favor of either a

preliminary or a permanent injunction. Plaintiff’s failure to succeed on the merits

of its protest also denies plaintiff a declaratory judgment in its favor. This bid

protest must be dismissed for the above reasons.

Accordingly, it is hereby ORDERED that:

(1) Plaintiff’s Motion to Compel Agency to Complete the Administrative

Record and for Additional Remedial Action, filed January 11, 2013, is

DENIED as moot;

(2) Plaintiff’s Motion to Supplement the Administrative Record, filed

January 15, 2013, is GRANTED in part, as to Plaintiff’s Exhibits 1-3

and 6, and DENIED in part, as to Plaintiff’s Exhibits 4-5;

(3) Plaintiff’s Motion for Leave to Exceed Page Limits of Memorandum,

filed January 15, 2013, is GRANTED;

(4) Plaintiff’s Motion for Judgment on the Administrative Record and

Entry of Injunctive Relief, filed January 15, 2013, is DENIED;

(5) Defendant’s and Intervenor-Defendant’s Motions for Judgment on the

Administrative Record, both filed January 18, 2013, are GRANTED;

22

/ ...continue

with plaintiff that the absence of Table 3-2 frustrates effective judicial review of plaintiff’s

requests for injunctive relief, or of the government’s laches defense. The court notes, further,

that even if an adverse inference were drawn against defendant on the security clearance issue,

this one component of the arguments made by the government as to laches and injunctive relief

is not so crucial that the weight of evidence would tip in plaintiff’s favor. The court would still

rule in favor of the government on laches, and would still deny plaintiff injunctive relief.

36

(6) Plaintiff’s Second Motion to Supplement the Administrative Record,

filed January 22, 2013, is GRANTED in part, as to Plaintiff’s

Exhibit 7, and DENIED in part, as to Plaintiff’s Exhibits 8-13;

(7) The Clerk’s Office is directed to ENTER final judgment in favor of

defendant and intervenor-defendant, DISMISSING the complaint

with prejudice;

(8) On or before February 22, 2013, counsel for the parties shall

CONFER and FILE with the Clerk’s Office a redacted copy of this

opinion, with any material deemed proprietary marked out and

enclosed in brackets, so that a copy of the opinion can then be

prepared and made available in the public record of this matter; and

(9) Each party shall bear its own costs.

/s/Lynn J. Bush

LYNN J. BUSH

Judge

37