International Resource Recovery, Inc. v. United States

61 Fed. Cl. 38, 2004 U.S. Claims LEXIS 164, 2004 WL 1532240
United States Court of Federal Claims·Decided June 24, 2004·No. No. 04-154C·Published·Cited by 22 cases

Opinion

ORDER AND OPINION DENYING DEFENDANT’S MOTION TO STRIKE AND AUTHORIZING ADDITIONAL SUPPLEMENTATION OF THE ADMINISTRATIVE RECORD

WILLIAMS, Judge.

In this post-award bid protest, Plaintiff, International Resource Recovery, Inc. (IRRI), an incumbent contractor who performed trash pick-up services, challenges the Army’s rejection of its proposal, claiming the rejection was arbitrary and capricious because the agency imposed more stringent requirements for a mobilization plan on IRRI than on other offerors and performed an erroneous past performance evaluation. In addition, Plaintiff alleges bad faith and bias on the part of the agency and two contracting officers.2 This matter comes before the Court on Defendant’s Motion to Strike Exhibits to Plaintiffs Motion for Judgment upon the Administrative Record.3

Plaintiff seeks to supplement the Administrative Record with exhibits which indicate that the Contracting Officer (CO) was biased against IRRI. The exhibits indicate, inter alia, that the CO had allegedly terminated IRRI’s prior contract for default based upon erroneous information prior to the expiration of the cure period. The exhibits further indicate that the CO knew that IRRI’s prior termination for default had been converted to a termination for convenience, but the record is unclear as to whether or how this change in IRRI’s past performance was considered in the evaluation. Plaintiff claims that its past performance report was erroneous and this was a significant factor in the agency’s decision to reject IRRI’s offer without conducting discussions.

Defendant contends that IRRI waived its bad faith claims, but the record does not support this assertion. Because the Administrative Record does not indicate whether IRRI’s revised termination status was considered in the evaluation of IRRI’s risk or how it was weighed, the record must be supplemented. As such, Defendant’s Motion to Strike is denied.4

Background

In seeking a preliminary injunction, Plaintiff argued that the Army’s rejection of its proposal for failure to submit a mobilization plan was arbitrary and capricious because Plaintiff was already fully mobilized and the Army, as a matter of past practice, had not required mobilization plans from incumbents. The Court denied Plaintiff’s motion for a preliminary injunction, finding that Plaintiff had failed to comply with a mandatory requirement of the solicitation calling for a mobilization plan and that the Army was not obligated to waive that requirement for incumbents. International Resource Recovery, Inc. v. United States, 60 Fed.Cl. 1 (2004).5

[40]*40On May 19, 2004, Plaintiff filed a Motion for Judgment upon the Administrative Record requesting a permanent injunction, changing its tack. Now Plaintiff has abandoned its past practice theory and argues that the agency’s rejection of its proposal was arbitrary and capricious for different reasons, primarily relying on allegations of bad faith and bias — alleging that the rejection of its proposal was based on the personal animosity of two contracting officers.

In its Complaint IRRI alleged that Contracting Officers Phyllis Koike and Charles Jaber harbored animosity against Plaintiff, as follows:

14. The conduct of the contracting officers, Phyllis Koike and Charles Jaber, is and has been conduct that has indicated a demonstrated animosity and prejudice against IRRI based on personal ill-will and spite.
15. Koike and Jaber have repeatedly and systematically issued false statements about IRRI’s past performance on military contracts to third-parties. They have done so knowing said statements are false or with a reckless disregard for the truth or falsity of said statements. Said statements have been intended to and in fact have harmed IRRI in its business. They have done so within the course and scope of their employment with the United States.
16. Jaber has intentionally, recklessly and/or negligently failed to pass on important Army documents regarding safety issues that [ajffect IRRI’s business as a contractor with the Army
18. The conduct of the Army in rejecting IRRI’s proposal is arbitrary, capricious, involves an abuse of discretion and is otherwise not in accordance with the law. The rejection is based in substantial part on the personal animosity of the relevant contracting officers.

Complaint ¶¶ 14-16 and 18.6

In its Motion for Judgment upon the Administrative Record, Plaintiff amplifies the bases for its allegations of bias and bad faith. Specifically, Plaintiff claims the Army improperly rated IRRI’s past performance, incorrectly determining that it had been terminated for default on a prior similar contract when Contracting Officer Jaber knew that IRRI’s termination for default had been converted to a termination for convenience as the result of a settlement agreement in litigation before the Armed Services Board of Contract Appeals (ASBCA).7 Plaintiff argued:

In our case the government, and specifically, CO Jaber, permitted the entire source selection team [to] sign a memorandum that he knew was premised on incorrect information. CO Jaber as contracting officer for the current solicitation as well as the solicitation where he improperly terminated IRRI for default, was specifically aware that the prior termination was converted from default to convenience. However, despite knowing this, he permitted the evaluators and source selection memorandum to rely on this fact in determining that any discussion[s] held with IRRI would be futile. The [s]ouree selection memorandum, signed by CO Jaber stated:
[]
AR, Tab 28 at 25.
[41]*41Therefore, the government’s actions in relying on clearly erroneous information, as well as violating its settlement agreement not to cast negative inferences from its performance on that contract was in bad faith.

Plaintiffs Motion For Judgment upon the Administrative Record at 31-32.

The current Administrative Record is unclear as to whether IRRI’s past performance rating was amended in the instant procurement as a result of the conversion of its default termination to a termination for convenience.8 Although IRRI’s risk rating for past performance appears to have changed from [ ] to [ ], the record does not indicate why that was done or whether, or how heavily the change in termination status of IRRI’s Residential Contract was weighed in changing its rating.9

Plaintiff seeks to supplement the record with seven exhibits which can be summarized as follows:

• A final arbitration award decision in Horizon Waste Services of Hawaii, Inc. v. International Resource Recovery, Inc., No.

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International Resource Recovery, Inc. v. United States, 61 Fed. Cl. 38, 2004 U.S. Claims LEXIS 164, 2004 WL 1532240 (uscfc 2004).

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