Acrow Corp. of America v. United States

97 Fed. Cl. 161, 2011 U.S. Claims LEXIS 5, 2011 WL 62118
CourtUnited States Court of Federal Claims
DecidedJanuary 7, 2011
DocketNo. 10-682C
StatusPublished
Cited by7 cases

This text of 97 Fed. Cl. 161 (Acrow Corp. of America v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Acrow Corp. of America v. United States, 97 Fed. Cl. 161, 2011 U.S. Claims LEXIS 5, 2011 WL 62118 (uscfc 2011).

Opinion

MEMORANDUM OPINION AND ORDER1

CHRISTINE O.C. MILLER, Judge.

This matter is before the court after argument on the parties’ cross-motions for judg[163]*163ment on the administrative record. The narrow issues before the court are whether the contract awardee made a material misrepresentation to the contracting officer that she relied on so as to render her responsibility determination arbitrary and capricious, or whether the contracting officer’s failure to consider the full text of a proposed counterclaim that particularized information that she reviewed generally in other documents rendered her decision arbitrary and capricious.

FACTS

1. History of the procurement

Plaintiff protests the award of Solicitation No. W56HZV-09-R-0480 (the “Solicitation”) to defendant-intervenor Mabey Bridge & Shore, Inc. (“MBSI”), on the ground that the United States Army TACOM Life Cycle Management Command (“TACOM”) improperly determined that MBSI was a responsible offeror. The Solicitation included a firm, fixed-price five-year requirements contract, with two one-year options, to build a Line of Communication Bridge (“LOCB”) system that transports ground forces in the U.S. Army across dry and wet “gaps.” Admin. R. (“AR”) filed Oct. 19, 2010, at 49. LOCB systems “ensure support forces are able to move freely and without delay throughout a given theater of operation.” Compl. filed Oct. 8, 2010, ¶ 14.

The Solicitation articulated the method of determining which proposal provided the “best value,” stating, in relevant part:

[T]he Government will evaluate the following factors: Experience, Price, Technical and Small Business Participation. Experience is equal in importance to Price. Price is more important than Technical. Technical is more important than Small Business Participation. The non-price factors when combined are more important than Price.
(a) [The Government will] award a contract to the offeror that:
(1) ... provides the best value to the Government if factors in addition to price are identified elsewhere in this solicitation, and
(8) meets all the responsibility criteria at FAR 9.104.

AR at 161-62. The Solicitation further mandated that, “[p]er FAR 9.103, contracts will be placed only with the Contractors that the Contracting Officer determines to be responsible. Prospective Offerors ... must be able to demonstrate that they meet standards of responsibility set forth in FAR 9.104.” AR at 161. 48 C.F.R. (FAR) § 9.104-1 (2010), lists seven aspects of “responsibility” that a contracting officer should consider in coming to a responsibility determination, among which is the requirement that “a prospective contractor must ... (d) [h]ave a satisfactory record of integrity and business ethics (for example, see Subpart 42.15).” Id.

In 2009 TACOM awarded plaintiff an Operational Needs Statement (“ONS”) contract to make similar, although not identical, bridge systems. See Declaration of William T. Killeen, Nov. 29, 2010, ¶ 3; see also Declaration of David W. Marek, Dec. 2, 2010, ¶ 2 (“Marck Deel. II”) (noting that while there are similarities between plaintiff’s ONS contract and disputed procurement, there are also several differences). Contract performance on the ONS contract began March 17, 2009, Killeen Deel. ¶ 15, and is set to expire March 16, 2012, PL’s Br. filed Oct. 29, 2010, at 3.

TACOM notified plaintiff of the Solicitation on December 2, 2009, and plaintiff submitted its proposal on January 18, 2010. MBSI, plaintiffs competitor in the bridge-supply industry, was the only other offeror to submit a proposal. MBSI is part of a group of bridging manufacturing and supply companies known as the Mabey Group of companies based the United Kingdom. Prior to October 1, 2009, a now-defunct company called Mabey & Johnson Ltd. (“M & J”), was the primary bridge “manufacturer of the Ma-bey Logistics Support Bridge.” AR at 545. MBSI is, and M & J was, a division of Mabey [164]*164Engineering (Holdings) Ltd. and ultimately of its parent company, Mabey Holdings Ltd., all of which are part of the Mabey Group; however, in October 2009, Mabey Bridge Ltd. (“MBL”) purchased M & J’s assets and contracts. M & J now exists as a defunct subdivision of MBL, maintaining, as of March 2, 2010, only “some residual trade.” AR at 579. MBL is now MBSI’s substantial subcontractor and prospective manufacturer and subcontractor under MBSI’s proposal. MBSI has “supplied Line of Communication Bridging worth $125 million” since 2003. AR at 582.

M & J had been the source of recent international controversy initiated by a draft counterclaim making allegations about M & J by former Mabey manager Jonathan Danos. Mr. Danos was engaged in negotiating commissions with M & J’s agents in various countries in Africa and South America. See AR at 3622 (the “Danos counterclaim”). The Danos counterclaim arose from a proceeding instigated by M & J on January 11, 2007, against Mr. Danos; “M & J claimed that Mr. Danos had acted in breach of his contract of employment and his fiduciary duty by agreeing to pay an inflated commission figure to the Jamaican agent in order that he and the agent could secretly profit at M & J’s expense .... ” AR at 3408 (Prosecution Opening Note in UK litigation against M & J (the “Prosecution Opening Note”)).2 However, Mr. Danos countered in a draft amended defense and counterclaim that it was “ ‘common practice’ for M & J to pay government officials in order to secure contracts.” Id. Although it appears the litigation was settled, the draft amended defense and counterclaim was sent to M & J’s attorneys and ultimately led M & J to conduct a widespread investigation and to voluntarily report itself to the Serious Fraud Office of the United Kingdom (the “SFO”). AR at 3409.

M & J pled guilty on September 25, 2009, for corrupt practices for contracts in Jamaica and Ghana, including payments from 1993 through 2001 of bribes in the form of large commissions, and for breaching a United Nations embargo on trade with Iraq from 2001 through 2002. The charges were brought by the SFO, which outlined its case and terms of a settlement in the Prosecution Opening Note. The SFO alleged that M & J routinely paid agents commissions that ranged from contract to contract, but that historically included fees of five to fifteen percent. AR at 3404. In particular, in Jamaica and Ghana, M & J was aware that “its agents were involved in corrupt relationships with public officials,” and M & J accepted that it agreed with these agents to bribe public servants with money from the agent’s commission payments. AR at 3405. To that end, the SFO charged that M & J “employed known bribers as agents for commercial gain from the outset.” Id. The SFO asserted that it is “beyond reasonable argument that unless properly monitored and controlled, the payment of commissions is a corruption Ted flag' exposing the company to risk. What it may provide is a convenient smokescreen to deny corporate or individual knowledge of arrangements conducted overseas.” Id.

[165]*165The SFO limited its pursuit of indictment charges against M & J to contracts in Jamaica and Ghana, even though M & J disclosed corrupt dealings in Madagascar, Angola, Mozambique, and Bangladesh. AR at 3407.

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Cite This Page — Counsel Stack

Bluebook (online)
97 Fed. Cl. 161, 2011 U.S. Claims LEXIS 5, 2011 WL 62118, Counsel Stack Legal Research, https://law.counselstack.com/opinion/acrow-corp-of-america-v-united-states-uscfc-2011.