Level 3 Communications, LLC v. United States

129 Fed. Cl. 487, 2016 U.S. Claims LEXIS 1856, 2016 WL 7100549
United States Court of Federal Claims·Decided December 5, 2016·No. 16-829·Published·Cited by 10 cases

Opinion

Administrative Procedures Act (“APA”), 5 U.S.C. § 706;

Bid Protest Jurisdiction, 28 U.S.C. § 1491;

Contract Award Procedures, 10 U.S.C § 2305;

Defense Federal Acquisition Regulation Supplement (“DFARS”) 252.239-7005, 252.239-7006;

Federal Acquisition Regulation (“FAR”) 14.405, 15.101-2, 15.305(a), 15.306(a), 16.703, 52.249-14;

Rules of the United States Court of Federal Claims (“RCFC”)

11(b), 52.2, 54(d)(1).

MEMORANDUM OPINION RESOLVING CROSS-MOTIONS FOR JUDGMENT ON THE ADMINISTRATIVE RECORD AND ISSUING PERMANENT INJUNCTION

BRADEN, Judge.

This bid protest concerns the Defense Information Systems Agency’s decision to award a federal contract for construction and maintenance of a Structured, High Availabili *490 ty Telecommunications Circuit between Wi-esbaden, Germany and Arifjan, Kuwait to Verizon Deutschland GmbH at a price of $38.6 million more than the bid of Level 3 Communications, LLC, the company that had been performing on the job for several years. Today, the court has entered an injunction to prohibit any further work from being performed under this contract, but also ordered the Defense Information Systems Agency (“DISA”) to provide its files in this matter to the Inspector General of the Department of Defense for further investigation, particularly in light of the fact that lawyers from the Department of Justice and DISA informed the court, both in writing and at oral argument, that performance would not commence until December 1, 2016. In fact, performance began on June 29, 2016 and DISA “accepted” a completed telecommunications circuit on November 1, 2016— only a few days before the November 8, 2016 election. Although the court has authority to issue sanctions against the lawyers involved, the Inspector General has authority to ensure the integrity of the procurement process, and the Senate Armed Services Committee has oversight responsibility determine whether the American taxpayers are served by this type of procurement, albeit in support of our military requirements in the Middle East.

To facilitate review of this Memorandum Opinion, the court has provided the following outline:

I. Factual Background.
II. Procedural History.
III. Discussion.
A. Jurisdiction.
B. Standing.
C. Standard Of Review.
D. The Parties’ Cross-Motions For Judgment On The Administrative Record.
1. Level 3 Communications, LLC’s Argument.
2. The Government’s Response.
3.Verizon Deutschland GmbH’s Response.
. 4. The Court’s Resolution.
a. The Contracting Officer’s Decision Not To Seek A “Clarification” Was Arbitrary, Capricious, And An Abuse Of Discretion.
b. The Contracting Officer’s Decision Regarding NALLA Accreditation Was Arbitrary, Capricious, And An Abuse Of Discretion.
c. The Contracting Officer’s Decision Not To Seek Negotiations With Of-ferors Was Arbitrary, Capricious, And An Abuse Of Discretion.
E.Level 3 Communications, LLC Is Entitled To Injunctive Relief.
IV.Conclusion.

I. FACTUAL BACKGROUND. 1

On August 28, 2016, the Defense Information Systems Agency (“DISA”) issued Solicitation HC1021-15-T-3033 (“the Solicitation”) seeking a STM 64, AU4 Structured, High Availability Telecommunications Circuit (“the circuit”) between Wiesbaden, Germany and Arifjan, Kuwait with an original service date of November 30, 2016. AR Tab 6, at 150. After amendments to the Solicitation, the service date was revised to May 2, 2016. AR Tab 7, at 271.

The Solicitation requested offers for a fixed-price, indefinite-term delivery order for telecommunications installation, service, and maintenance, for an estimated service period of 60 months, ie., 5 years. AR Tab 6, at 166 (“All charges shall be understood to be firm fixed prices for the life of the contract.”); AR Tab 5, at 158 (“Contract for this telecommunication service shall be an indefinite term contract with an estimated contract period of 60 months.”).

Pursuant to paragraph M(6) of the Solicitation, telecommunication providers (“TPs”) were requested to submit offers to install and maintain two circuit “paths:” a “protect path” that could traverse the bodies of water between Germany and Kuwait, and a “working *491 path” that traversed only dry land. AR Tab 5, at 153. Paragraph M(6) also instructed offerors that the protect path and the working path could not traverse or touch a list of nations, including Iran. AR Tab 5, at 153.

Award of the contract was to be made to an offeror that submitted the lowest-priced, technically acceptable quote: “[q]uotes received in response to this Inquiry will be evaluated for technical sufficiency, ability to meet required service date, past performance, and total price.” AR Tab 5, at 157. Section A.1 of the Solicitation provided that:

[a]fter the receipt of quotes, the government will first evaluate the lowest price quote. If the lowest price quote is determined to be technically acceptable and otherwise properly awardable, no further evaluations will be conducted, and award will be made. If, however, the lowest price quote is determined to he technically unacceptable and/or otherwise not properly awardable, the next lowest price quote will be evaluated until a quote is deemed technically acceptable and otherwise properly awardable.

AR Tab 5, at 150 (emphasis added).

Level 3 Communications, LLC (“Level 3”) and Verizon Deutschland GmbH (“Vernon”), and six other companies, 2 submitted offers by the October 28, 2015 submission deadline. AR Tab 14, at 498; see also AR Tab 10, at 340 (Solicitation amendment changing submission deadline to October 28, 2015).

Level 3 was the incumbent contractor and current provider of the existing telecommunications circuit between Wiesbaden, Germany, and Arifjan, Kuwait. AR Tab 11, at 392. Level 3 had provided this circuit for approximately two years. AR Tab 20, at 983. Level 3⅛ offer stated that the new circuit would follow the same working path, and did not traverse Iran. AR Tab 11, at 392 (“Level 3’s proposal utilizes a working path that is identical to the current [path] from Camp Arifjan to Wiesbaden.”); AR Tab 11, at 397 (‘Working path does not touch or go through Iran[.]”).

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Level 3 Communications, LLC v. United States, 129 Fed. Cl. 487, 2016 U.S. Claims LEXIS 1856, 2016 WL 7100549 (uscfc 2016).

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