Transatlantic Lines LLC v. United States

68 Fed. Cl. 48, 2005 U.S. Claims LEXIS 295, 2005 WL 2654360
CourtUnited States Court of Federal Claims
DecidedSeptember 30, 2005
DocketNo. 05-866C
StatusPublished
Cited by19 cases

This text of 68 Fed. Cl. 48 (Transatlantic Lines LLC 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
Transatlantic Lines LLC v. United States, 68 Fed. Cl. 48, 2005 U.S. Claims LEXIS 295, 2005 WL 2654360 (uscfc 2005).

Opinion

ORDER AND OPINION

HODGES, Judge.

This is a post-award bid protest. Plaintiff TransAtlantic entered a contract with the Department of the Army, Military Surface Deployment and Distribution Command to transport cargo between Florida and Guantanamo Bay beginning in 2002. The Government awarded the new contract to intervenor Strong Vessel Operators. Plaintiff disputed the award because of alleged violations of procurement statutes and regulations. Strong Vessel intervened.

The issues in this case are (1) whether the contracting officer made a reasonable effort to insure that Strong Vessel’s refrigerated cargo containers would meet the standards called for in the solicitation; and (2) whether the Agency allowed Strong Vessel to avoid Small Business Administration regulations governing limitations on labor costs. The contracting officer did not make a reasonable inquiry to insure that Strong Vessel’s refrigerated cargo containers met the Government’s needs; and he did not enforce statutes and regulations applicable to small business concerns.

We grant plaintiffs petition for an order enjoining defendant from awarding this contract to intervenor Strong Vessel Operators. The parties will meet with the court as soon as possible to discuss appropriate remedies or other means of resolving this matter.

BACKGROUND

The Military Surface Deployment and Distribution Command is a Department of the Army agency responsible for transportation of equipment and supplies for military personnel around the world. The contract at issue is a firm, fixed-price requirements contract for transportation of cargo from Jacksonville, Florida to military personnel stationed in Guantanamo Bay, Cuba. It is a 100% set-aside for small business.2

Defendant issued a Request for Proposals in October 2004 with three evaluation criteria. These were technical capability, past performance, and price. Technical capability was more important than past performance, and the two factors together were approximately equal to price. The Agency announced in April 2005 that Strong Vessel submitted the winning proposal for an estimated $16.1 million.

Plaintiff filed a protest with the General Accounting Office, contending that Strong Vessel did not meet the requirements of the solicitation in two respects: (1) A small business concern awarded a set-aside contract for services must pay at least fifty percent of its labor costs on the contract to its own employees. Plaintiff alleged that Strong Vessel did not meet this SBA set-aside requirement. (2) Strong Vessel did not meet a technical requirement that the offeror provide refrigerated cargo containers that would insure the safety of perishable goods during transit. The equipment was to include a generator that would permit the system to be self-sustaining aboard ship, so the goods would survive if the barge lost power at sea.

The GAO denied plaintiff’s protest in July 2005, ruling that plaintiffs allegations regarding SBA set-aside requirements were untimely, and that the contracting officer reasonably determined that Strong Vessel’s refrigerated containers would be self-sustaining. Plaintiff sued here in August 2005.

APPLICABLE LAW

We review bid protests according to standards enacted as part of the Administrative Dispute Resolution Act of 1996, Pub.L. No. 104-320. See 28 U.S.C. § 1491(b). The Act provides that an “interested party” may file an objection to “a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 [51]*51U.S.C. § 1491(b)(1). This court employs the standards of the Administrative Procedure Act in considering such protests. 28 U.S.C. § 1491(b)(4). The Administrative Procedure Act authorizes the court to set aside actions by an agency that are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A).

The term “interested party” is defined consistently with the definition of the same term in the Competition in Contracting Act of 1984, 31 U.S.C. § 3551(2)(A). Am. Fed’n of Gov’t Employees AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed.Cir.2001). Standing to bring a protest as an interested party under the Administrative Dispute Resolution Act is “limited to actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract.” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1352 (Fed.Cir.2004) (quoting Am. Fed’n of Gov’t Employees, 258 F.3d at 1302). We address the issue of prejudice before considering the merits of a bid protest. Info. Tech. Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed.Cir.2003) (holding that a “question of prejudice goes directly to the question of standing, [therefore] the prejudice issue must be reached before addressing the merits.”).

A losing bidder seeking to interfere with a government procurement must meet a high burden. See, e.g., Banknote Corp., 365 F.3d at 1351; Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed.Cir.2000) (noting that the “arbitrary and capricious standard ... is highly differential ... [and] requires a reviewing court to sustain an agency action evincing rational reasoning and consideration of relevant factors.”); see also Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed.Cir.1996) (ruling that a “protester must show not only a significant error in the procurement process, but also that the error prejudiced it.”).

Plaintiff must establish that the procurement lacked a rational or reasonable basis and that the procurement involved a clear and prejudicial violation of applicable statutes and regulations to prevail in a bid protest. Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332-33 (Fed.Cir.2001); Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859, (D.C.Cir.1970). So long as a rational basis exists, the agency decision will be upheld. Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). The contracting agency must judge offerors fairly, however, applying the same standards to each.

The trial court in Alfa Laval Separation, Inc. v. United States

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68 Fed. Cl. 48, 2005 U.S. Claims LEXIS 295, 2005 WL 2654360, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transatlantic-lines-llc-v-united-states-uscfc-2005.