Axiom Resource Management, Inc. v. United States

80 Fed. Cl. 530, 2008 U.S. Claims LEXIS 49, 2008 WL 541675
CourtUnited States Court of Federal Claims
DecidedFebruary 26, 2008
DocketNo. 07-532C
StatusPublished
Cited by3 cases

This text of 80 Fed. Cl. 530 (Axiom Resource Management, Inc. 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
Axiom Resource Management, Inc. v. United States, 80 Fed. Cl. 530, 2008 U.S. Claims LEXIS 49, 2008 WL 541675 (uscfc 2008).

Opinion

MEMORANDUM OPINION AND FINAL ORDER GRANTING LIMITED INJUNCTIVE RELIEF.

BRADEN, Judge.

I. THE COURT’S POST-DECISION INQUIRY REGARDING RELIEF.1

On September 28, 2007, the United States Court of Federal Claims held that the Contracting Officer (“CO”), in this case, violated Federal Acquisition Regulation (“FAR”) § 9.504(a),2 by not identifying a potential “impaired objectivity” conflict,3 but awarding [531]*531a TRICARE Management Activity (“TMA”) contract for the United States Department of Defense’s healthcare program to Lockheed Martin Federal Health Insurance, Inc. (“Lockheed Martin”). See Axiom I, 78 Fed. Cl. 576, 600 (2007). In addition, the court determined that the CO did not exercise sound discretion as required by FAR § 9.504(e) in developing an Organizational Conflict of Interest (“OCI”)4 mitigation plan to correct the belatedly identified “unequal access to information” conflict,5 ie., a plan that: did not afford Lockheed Martin any significant competitive advantages; was enforceable, i.e., subject to court order; and otherwise did not impose any anticompetitive effects on future competition. Id. at 600.

In considering what relief was appropriate, the court requested additional briefing on three questions: “(1) whether Lockheed Martin should be required to divest existing Category 3 contracts [Product Support],6 if the current Category 2 [Program Management Support]7 award stands; (2) whether current TMA Policy and Lockheed Martin’s voluntary mitigation efforts are sufficient to ameliorate the conflicts of interest at issue; and (3) whether the non-disclosure agreements that Lockheed Martin has required Plaintiffs former employees to sign or other mitigation proposals may foreclose future competition for these services when the current Task Order expires in three years.” Id at 601.8

On November 16, 2007, Lockheed Martin moved to intervene. On December 3, 2007, the court granted that motion.

On December 14, 2007, the Government filed a Response addressing the first two questions posed in the court’s September 28, 2007 Memorandum Opinion and Order (“Def.Resp.”).9 On that same date, Lockheed Martin filed a Motion For Leave To File Motion And Memo To Correct The Record (“Int. Mot. to Correct”). Therein, the court was advised that Lockheed Martin recently became aware that “the categorizations of services for ... TMA contracts are neither as formal nor as rigid as we previously understood.” Id. at 2. Specifically, Lockheed Martin identified a Pharmacy Operation Center contract with TMA that entails both Category 2 and Category 3 work, but does not expire until August 2010. Id. at 3 (citing AR 85). In addition, a Military Health Sys[532]*532tem Customer Support Center task order and MHS Composite Health Care System II contract also involve both Category 2 and Category 3 work. Id. at 4 (citing AR 78, 81). Lockheed Martin also represented that a TMA Aurora Shared Support IT Services Order that initially was awarded as a Category 3 contract, subsequently was modified to include Category 2 work. Id. at 4. In addition, Lockheed Martin advised the court that the Category 3 services being provided to TMA under a Theater Medical Information Program (“TMIP”) contract would end on December 31, 2007. See Int. Mot to Correct at 1, 3.

The CO apparently was unaware of the totality of this information prior to awarding the contract at issue. See AR 607-09 (showing that the CO identified the MHS Customer Support Center Task Order, Theater Medical Information Program contract, and MHS Composite Health Care System II contract, but did not consider that they created a potential OCI, and listed the TMA Aurora Shared Support IT Services Order and Pharmacy Operation Center Service Support contract as creating a potential conflict regarding only Category 3 work).

On December 17, 2007, the court convened a conference to discuss Lockheed Martin’s post-award post-decision correction to the record and the Government’s December 14, 2007 Response to the court’s September 28, 2007 Memorandum Opinion and Order. At that conference, Lockheed Martin indicated a willingness to incorporate the terms of the proposed mitigation plan10 into a contract modification. See 12/17/07 TR at 12-14.11 The court explained that this proposal was acceptable; however, the court was not satisfied that the plan would be enforced.

THE COURT: I don’t have any problem with the mitigation efforts ... other than they’re voluntary.
The Plaintiffs experts ... and the [G]overnment’s conduct in this case so far has convinced me that there will be very little oversight of those mitigation efforts ... [T]he [Government doesn’t seem to even have the appreciation that [Lockheed Martin does about] the Category 2, 3 contracts, so [the Government is] in a hard position to argue to me that I can rely on them____I’m not satisfied with where we are in these Category 2 versus 3 contracts, and I’m not satisfied with the voluntary mitigation efforts.

Id. at 5.

THE COURT: FAR 9.502(c) authorizes restrictions on future activities where ... a conflict [is] identified____ I’ve found a conflict____And what I’m trying to do is ascertain exactly what [Lockheed Martin’s] mitigation plans are going to be and see if those might be incorporated into an order now that [Lockheed Martin is] a party in the case.

Id. at 14-15.

LOCKHEED MARTIN’S COUNSEL: The concern I think we would have ... with this order would be that it not be interpreted in a way such that the transaction-by-transaction analysis that the FAR requires doesn’t get performed on the [G]overment side[.]
THE COURT: Well, the Plaintiffs experts convinced me that there [were] no [Government] personnel ... even to watch over your shoulder[.]
I will set [the contract] aside based on the violation of the record ... unless you’re willing ... to put these mitigation [533]*533proposals in a court order. I’d like to have somebody responsible for reviewing them.
* * *
The [Government obviously was awfully slow on the uptake[, but is] finally coming to grips with the fact that there was a conflict here. They did it. They did it late____ [Lockheed Martin] now say[s], well, the [G]overnment doesn’t understand these contracts very well. There’s a lot of flexibility between 2 and 8. Well, that may be, but the [Government didn’t tell me that____ I’m concerned about these mitigation efforts to be sure they’ve got some teeth in them[.]

Id. at 17-19.

* * *
GOVERNMENT COUNSEL: [T]o ameliorate some of your concerns, it may be possible, and I would have to speak with the representatives of the TMA—
THE COURT: Yes.
GOVERNMENT COUNSEL: Lieutenant Colonel Lewis and I would have to speak with individuals at the TMA.
THE COURT: Okay.

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Cite This Page — Counsel Stack

Bluebook (online)
80 Fed. Cl. 530, 2008 U.S. Claims LEXIS 49, 2008 WL 541675, Counsel Stack Legal Research, https://law.counselstack.com/opinion/axiom-resource-management-inc-v-united-states-uscfc-2008.