Klinge Corp. v. United States

82 Fed. Cl. 127, 2008 U.S. Claims LEXIS 168, 2008 WL 2461487
CourtUnited States Court of Federal Claims
DecidedJune 10, 2008
DocketNo. 08-134C
StatusPublished
Cited by14 cases

This text of 82 Fed. Cl. 127 (Klinge Corp. 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
Klinge Corp. v. United States, 82 Fed. Cl. 127, 2008 U.S. Claims LEXIS 168, 2008 WL 2461487 (uscfc 2008).

Opinion

OPINION

ERIC G. BRUGGINK, Judge.

This action is brought pursuant to the court’s bid protest jurisdiction. Plaintiff, Klinge Corporation (“Klinge”), alleges that the United States, acting through the Marine Corps Systems Command (“the agency”), has acted arbitrarily, capriciously, and in violation of law, in awarding a contract for the delivery of “Large Field Refrigeration Systems” (“LFRSs”) to the intervenor, Sea Box, Inc. (“Sea Box”). Plaintiff initially filed a complaint requesting permanent injunctive relief and a motion for preliminary injunction. We denied the motion for preliminary [128]*128injunctive relief without prejudice on the grounds of mootness after defendant represented that the agency would voluntarily stay the procurement pending the protest. After initial review of the Administrative Record (“AR”), we canceled the planned exchange of cross-motions on the record and instead remanded to the agency for clarification of one aspect of the agency’s decision. We permitted the parties to submit further explanations of their proposals to the agency for it to reconsider its decision in light of that new information. On remand, the agency confirmed the award to Sea Box. After the remand process, plaintiff was permitted to file an amended complaint.

Now pending are cross-motions for judgment on the record on plaintiffs request for permanent injunctive relief. Oral argument was held on May 29, 2008. As we announced at the oral argument, and for the reasons set out below, we grant plaintiffs motion for judgment on the administrative record and direct permanent injunctive relief.

BACKGROUND

On April 10, 2007, the agency issued Request for Proposal (“RFP”) M67854-07-R-5060. Through the RFP, the agency sought to procure an indefinite quantity of LFRSs. These are large, portable, refrigerated containers. They consist of two primary components, a refrigeration unit (“RU”) and an insulated container. This part of the proposal was covered by Contract Line Item Number “(CLIN”) 0001. In addition, the RFP sought, among other things, a two-year parts support package. This part of the work was covered by CLIN 0003. The procurement was to be conducted in accordance with Federal Acquisition Regulation (“FAR”) part 15 as a best value, negotiated procurement for a commercial product. The RFP contemplated an indefinite delivery/ indefinite quantity contract with a minimum of 10 and a maximum of 300 units. The contract would have a base period of one year with four option years.

The contract was subject to the Trade Agreements Act (“TAA”), 19 U.S.C. §§ 2501 et seq. (2000). 48 C.F.R. § 25.402(b) (2007). The solicitation required offerors to certify, “[f]or all line items subject to the Trade Agreements clause of this solicitation ... each end product to be delivered under this contract ... is a U.S.-made, qualifying country, or designated country end product.” Defense Federal Acquisition Regulation Supplement (“DFARS”) 252.225-7020 (Trade Agreements Certificate). The DFARS standard clause 252.225-7021(a)(12), incorporated in the solicitation by Amendment No. 1 to the RFP (AR at 43) instructs offerors that a “US-made end product” is one that is “mined, produced, or manufactured in the United States” or is “substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.” DFARS 252.225-7021(a)(12).

The “best value” award was to be based on four evaluation factors: (a) “Operational Effectiveness” (most important), (b) “Past Performance” (less important), (c) “Supportability” (least important), and (d) “Price” (evaluated but not rated). (AR at 42.) In making its determination, the agency considered “overall technical, past performance, and supportability merit to be of significantly greater importance than evaluated price. However, the importance of price as a factor in the final determination will increase with the degree of equality in the overall merits of the proposals.” Id. Klinge, Sea Box, and three other offerors submitted proposals.

It was clear from Sea Box’s initial proposal that its container would be built in China and that the RU would be shipped from Singapore to China to be joined with the container. China was listed in the schedule of work as the place of “Final Assembly.” (AR at 105 (Sea Box Initial Proposal).) Sea Box certified, however, that Singapore was the “country of origin” of its LFRS. Id. at 157, 160. Singapore is a “qualifying country” under the TAA. In a separate entry on its proposal form, Sea Box indicated that the “Place of Manufacture,” was “Outside the United States.” Id. at 160. After review of the initial proposals, the agency determined that Sea Box’s proposal provided the “best value” and awarded the contract to Sea Box on July 12, 2007.

[129]*129Klinge filed a protest with the Government Accountability Office (“GAO”) on July 30, 2007, challenging the award to Sea Box on two principal grounds: (a) the agency wrongfully eliminated Klinge from the competition based on a technical requirement not at issue here, and (b) Sea Box’s proposal was not compliant with the TAA. (AR at 817-36.) In response to the protest, the agency informed offerors that it would take corrective action by admitting Klinge back into the competitive range and reopening discussions with offerors. The GAO dismissed the protest as academic. (AR at 837-40 (Dismissal of B-309930 by the GAO and Notice of Corrective Action from USMC, Aug. 8 & 27, 2007).)

The agency then issued written discussion questions to Klinge and Sea Box on September 6,2007, which, among other things, asked the offerors to provide a TAA Certificate2 and to explain how their manufacturing processes satisfied the TAA. See (AR at 842 (Agency Questions to Sea Box, question 3), 885 (Agency Discussion Questions to Klinge, question 2).) Sea Box and Klinge submitted responses on September 12 and 13, 2007, respectively. Klinge submitted a completed TAA Certificate and an explanation of the place of manufacture of each component as well as where subsequent integration of the components took place. Klinge explained that it acquires its containers from a Chinese subcontractor, [ ], and integrates them with its U.S.-made refrigeration unit at its Pennsylvania facility and there conducts all testing and other finishing labor. (AR at 854-60.)

Sea Box likewise submitted a completed TAA Certificate and accompanying narrative of its manufacturing process. Sea Box represented that its end product would be a “U.S.-made, qualifying country, or designated country end product” and that “[n]o supplies are other [sic] nondesignated country end products.” (AR at 887.) Sea Box explained that its refrigeration unit, manufactured by [] in Singapore, is sent to China where it is “ultimately ... mechanically and electrically integrated within the basic ISO container structure.” Id. at 888. The container into which the refrigeration unit is integrated is also produced by CIMC in China. Id. Following integration in China, “the containers are then shipped to Sea Box’s East Riverton, New Jersey facility.” Id. Sea Box further explained:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Energizer Battery, Inc. v. United States
190 F. Supp. 3d 1308 (Court of International Trade, 2016)
Arkray USA, Inc. v. United States
117 Fed. Cl. 22 (Federal Claims, 2014)
Diversified Maintenance Systems, Inc. v. United States
93 Fed. Cl. 794 (Federal Claims, 2010)
PlanetSpace Inc. v. United States
92 Fed. Cl. 520 (Federal Claims, 2010)
Klinge Corp. v. United States
83 Fed. Cl. 773 (Federal Claims, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
82 Fed. Cl. 127, 2008 U.S. Claims LEXIS 168, 2008 WL 2461487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/klinge-corp-v-united-states-uscfc-2008.