In an opinion first publicly released on November 3, the Court of Federal Claims (COFC) took the somewhat usual, but not unheard of, step of sanctioning the government for mishandling the administrative record (AR) in a bid protest. Contractors can take heart that COFC will hold the government accountable when it fails to produce the entire AR. The decision also provides a useful reminder of one of the advantages of filing a protest at COFC rather than the Government Accountability Office (GAO).
As we recently wrote about on this blog, on August 2, Judge Solomson sustained a protest filed by Oak Grove Technologies that argued the putative awardee had improperly benefited from unmitigated unequal access to information and biased ground rules organizational conflicts of interests. The decision noted that the government had failed to include in the AR a Defense Contract Management Agency (DCMA) report indicating an offeror was ineligible and a letter terminating the chair of the Source Selection Evaluation Board that suggested the chair had failed to evaluate the offerors’ proposals fairly.
The decision admonished the government for its “sentient choices regarding the contents of the administrative record, all of which appear to have favored the Agency,” noting that “[s]uch apparent gamesmanship wastes judicial resources and undermines trust in both the procurement and disputes process.”
As a result, COFC ordered the government to “show cause why Defendant should not be sanctioned for wasting the Court’s (and Plaintiff’s) time and resources on these administrative record deficiencies.” The August 2 decision also ordered the government to show why monetary sanctions should not be imposed pursuant to both Rule 11 and the court’s inherent authority for “its piecemeal and improper handling to the administrative record ….”
COFC Rejects DOJ’s “If I Only Had a Brain” Defense
The government argued that no sanctions were warranted because the oversight was not the result of bad faith or fraud or any intentional omission by counsel at the Department of Justice (DOJ). Instead, the government claimed, the omissions were due to “the conception by the supporting contracting personnel … as to what the full scope of the AR should include for this protest.”
After a briefing by the parties and an oral argument, COFC concluded that Rule 11 sanctions were warranted. Even though the contracting officer certified that the record was complete to the best of his knowledge, it was clear that was not the case. The decision noted that in arguing the omission was not due to bad faith, DOJ addressed only the heightened standard applicable to imposing sanctions pursuant to the court’s inherent powers and failed to address the Rule 11 standard, which requires no showing of bad faith.
Indeed, if a showing of bad faith was required in this situation, it is unlikely sanctions would ever be appropriate for AR omissions as the government would always argue the errors were due to the agency’s “good faith belief” that a limited record was sufficient. It is precisely for this reason, the decision notes, that Rule 11 applies an objective standard “intended to eliminate any ‘empty-head pure-heart’ justification.”
According to Rule 11, COFC held that the failure to include the relevant document was “neither reasonable nor excusable” and had the following impacts:
- Contributed to substantial delays in the resolution of this case.
- Wasted the court’s time in attempting to engage in fact-finding on an incomplete record.
- Had the effect of imposing costs on Oak Grove due to, at a minimum, additional briefing, status conferences, and hearings.
At COFC, the Government Must Provide the Whole Hog
The decision puts to rest the idea that in COFC bid protests, agencies have the right to determine what is relevant to the protestor’s arguments and only produce those records. While that is generally the standard at the GAO, more is required at COFC, where agencies must produce all the records related to the procurement decision even if they were not considered in the award decision.
DOJ failed to meet that standard, omitting two important documents. The omissions demonstrate the dangers to the bid protest process of the government making undisclosed internal relevancy determinations regarding the content of the AR. As COFC notes, were it to condone the government’s conduct, it would inevitably lead to discovery battles regarding how the agency complied or what it omitted from the AR. Ultimately, it is unlikely that would benefit the government.
Sanctions Were Imposed
Due to the AR omissions, COFC ordered the government to pay the legal costs and expenses incurred by Oak Grove in dealing with the AR issues, including costs relating to supplemental AR filings, supplemental briefs, and the show cause hearing, among other costs. The parties were directed to meet and confer, and to file a joint status report no later than November 19.
If You Need the Whole Record, COFC is the Place to Be
As noted above, there is a significant distinction between the AR produced in the GAO bid process and the AR required at COFC. At the GAO, agencies produce only the portions of the record they believe are relevant to the protest grounds. In this way, agencies can improve the likelihood of successfully defending against protests and limit the chance that protestors will discover additional errors in the AR to raise in supplemental protest grounds.
The Oak Grove merits decision in August discusses this difference in footnotes 13 and 14 on page 20, citing an article by Kara Sacilotto & J. Freeze that discusses the difference in detail. Is a Record by Any Other Name Still a Record?, at *1 (American Bar Association 2021 Public Contract Law Virtual Federal Procurement Institute Mar. 12, 2021), available at https://www.americanbar.org/events-cle/ecd/ondemand/409718248/ (explaining that in contrast to GAO protest proceedings, “the COFC rules expressly requires production of the administrative record, without the need for the protester to explain the relevancy of those documents to the protest arguments raised” and that “the ‘relevant’ documents produced [at the GAO] can be a fraction of the actual record of the procurement before the agency evaluators and source selection authority” (emphasis in original)).
Key Takeaways for Filing Bid Protests
Filing bid protests at the GAO in the first instance is typically favored because it triggers an automatic stay of performance (protestor’s must move for an injunction at COFC), the costs tend to be lower, and because parties can always go to COFC if a GAO protest is denied (the opposite is not true). But the difference in the record produced by the government is becoming an increasingly important factor in deciding whether first to file a protest at COFC or the GAO. Because notwithstanding the advantages of first going to the GAO, if an agency can evade the production of records necessary to prove protest allegations, what’s the point?