Free Cross Motion [Dispositive] - District Court of Federal Claims - federal

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No. 08-62C (Judge Williams) IN THE UNITED STATES COURT OF FEDERAL CLAIMS BID PROTEST

RKR JOINT VENTURE, LLC., Plaintiff, v. THE UNITED STATES, Defendant.

DEFENDANT'S MOTION TO DISMISS, AND IN THE ALTERNATIVE, CROSS-MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD AND RESPONSE TO PLAINTIFF'S PARTIAL MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD

GREGORY G. KATSAS Acting Assistant Attorney General JEANNE E. DAVIDSON Director DONALD E. KINNER Assistant Director WILLIAM P. RAYEL Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20005 Tel. (202) 616-0302 Fax. (202) 307-0972 Attorneys for Defendant

OF COUNSEL: Gary R. Allen Air Force Legal Operations Agency, Commercial Litigation Division 1501 Wilson Blvd., Suite 600 Rosslyn, VA 22209

July 31, 2008

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TABLE OF CONTENTS PAGE(S) STATEMENT OF THE ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. II. III. The Solicitation And A-76 Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Course of Proceedings At GAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Course of Proceedings At This Court And The Contracting Officer's Cancellation Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 I. Standard Of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 A. B. C. II. Standard For Motion To Dismiss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Standard For Procurement Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Standard For Judgment Upon The Administrative Record . . . . . . . . . . . 14

This Court Does Not Possess Jurisdiction To Entertain RKR's Challenge To The Cancellation Of The Solicitation Because RKR Has Not And Cannot Prove That It Is Challenging A Solicitation, Proposed Award Or Award, Or That The Air Force Has Violated Any Statutes Or Regulations Related To The Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 The Decision Of The Air Force To Cancel The Solicitation Was Rational . . . . . 17 A. Because The Solicitation No Longer Accurately Reflects The Requirements Of The Air Force, The Decision To Cancel The Solicitation Was Rational . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1. The Requirements Of The Solicitation Do Not Include A NOSCCentric Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

III.

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2.

The Fact That General Maluda Did Not Identify Any "Quantum Leap" In AFNETOPs Between May 2007 And July 2007 Does Not Render The Cancellation Decision Irrational . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The Fact That AFNETOPs Has Not Been Completed Does Not Render The Cancellation Irrational . . . . . . . . . . . . . . . . . . . . 24 The Air Force's Mistaken Interpretation Of The Solicitation Before The GAO Does Not Render The Cancellation Irrational . 26 Even if AFNETOPs Alone Is Not A Sufficient Justification For Cancellation, The Uncertainty Created By Other Potential Changes Provides Sufficient Justification For Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 The Contracting Officer's Determination That Cancellation And Re-Solicitation Would Likely Increase The Number Of Bidders Was Rational . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

3.

4.

5.

6.

B.

The Contracting Officer Had A Rational Basis For His Determination To Cancel The Solicitation Based Upon A Change In Requirements And/Or Evaluation Criteria That Required Him To Amend The Solicitation And Seek New Proposals, And Substantial Concern That Amending The Solicitation And Obtaining New Proposals Would Be Illegal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 1. The Contracting Officer Had A Rational Basis For His Determination That There Was A Significant Change In Requirements That Required Him To Amend The Solicitation And Seek New Proposals . . . . . . . . . . . . . . . . . . . . 31 The Contracting Officer Had A Rational Basis For His Determination That The Solicitation Would Need To Be Amended To Add New Source Selection Criteria Required By Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 The Contracting Officer Had A Rational Basis For His Determination That There Was Substantial Concern That Amending The Solicitation And Obtaining New Proposals Would Be Illegal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2.

3.

IV.

RKR's Challenge To The Air Force's Cost Comparison Or Tentative Decision To Implement The MEO Is Moot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

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V.

RKR Is Not Entitled To Any Relief At This Stage, Even If The Court Determines That The Cancellation Was Irrational, Because RKR Has Not Proven Prejudice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 RKR Is Not Entitled To Injunctive Relief, Because RKR Has Not Proven That It Will Suffer Irreparable Harm Without Injunctive Relief, Or That Injunctive Relief Is In The Public Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 A. RKR Cannot Demonstrate That It Will Suffer Irreparable Harm If The Cancellation Is Not Overturned . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 RKR Cannot Demonstrate That Its Harm Outweighs The Harm To The Government Or That It Is In The Public Interest To Overturn The Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

VI.

B.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Attachment 1: Revised Supplemental Handbook, OMB Circular A-76 (Oct. 1984), Part I, Chapter 1, para. G.2 and Part I, Chapter 3, para. K.1.b (dated March 1996, updated through June 1999)

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TABLE OF AUTHORITIES CASES AND ADMINISTRATIVE DECISIONS ABF Freight System, Inc. v. United States, 55 Fed. Cl. 392 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 46 AT&T Commc'n, Inc. v. Wiltel, Inc., 1 F.3d 1201 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Aero Corp. v. United States, 38 Fed. Cl. 237 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45, 46 Alder Terrace, Inc. v. United States, 161 F.3d 1372 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Am. Gen. Leasing, Inc. v. United States, 218 Ct. C 587 F.2d 54 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Aviation Enterprises, Inc. v. United States, 8 Cl. Ct. 1, 19 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 17 Baird Corp. v. United States, 1 Cl. Ct. 662, 664 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Bannum, Inc. v. U.S., 404 F.3d 1346 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15, 39 Bannum, Inc. v. United States, 56 Fed. Cl. 453 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Beta Analytics Int'l, Inc. v. United States, 67 Fed. Cl. 384 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Briscoe v. LaHue, 663 F.2d 713 (7th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Bromley Contracting Co. v. United States, 15 Cl. Ct. 100, 105 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 CACI, Inc.-Federal v. United States, 719 F.2d 1567 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 CC Distrib., Inc. v. United States, 38 Fed. Cl. 771 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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CCL Serv. Corp. v. United States, 43 Fed. Cl. 680 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim CW Gov't Travel, Inc. v. United States, 46 Fed. Cl. 554 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 California Marine Cleaning, Inc. v. United States, 42 Fed. Cl. 281 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Camp v. Pitts, 411 U.S. 138, 142 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Campbell v. United States, 2 Cl. Ct. 247 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Candle Corp. v. United States, 40 Fed. Cl. 658 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Cincom Sys., Inc. v. United States, 37 Fed. Cl. 263 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Cincom Sys., Inc. v. United States, 37 Fed. Cl. 663 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Claude E. Atkins Enterprises, Inc., B-241047, 91-1 CPD ¶ 42, 1991 WL 79363 (Comp. Gen. Jan. 15, 1991) . . . . . . . . . . . 18 County of Los Angeles v. Davis, 440 U.S. 625 (1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Cygnus Corp. v. United States, 72 Fed. Cl. 380 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 30 DGS Contract Serv., Inc. v. United States, 43 Fed. Cl. 227 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 D-K Assocs., Inc., 62 Comp. Gen. 129 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Data Monitor Sys., Inc. v. United States, 74 Fed. Cl. at 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 41 Defense Group, Inc., B-253795, 94-1 CPD ¶ 196, 1993 WL 603568 (Comp. Gen. Oct. 23, 1993) . . . . . . . . . 18

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Florida Power & Light v. Lorion, 470 U.S. 729 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 GAF Bldg. Materials Corp. v. Elk Corp., 90 F.3d 479 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Great Lakes Dock & Dredge Co. v. United States, 60 Fed. Cl. 350 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Hart v. United States, 910 F.2d 815 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Heritage of Am., LLC v. United States, 77 Fed. Cl. 66 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Hospital Klean of Tex, Inc. v. United States, 65 Fed. Cl. 618 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Impressa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Kalvar Corp. Inc. v. United States, 211 Ct. C 543 F.2d 1298 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Keco Industries v. United States, 203 Ct. Cl. 566, 492 F.2d 1200 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 43 Lackland 21st Century Servs. Consol., B- 285938.7, B- 285938.8, 2001 CPD ¶ 197, 2001 WL 1543693, *4 (Comp. Gen. Dec. 4, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . 13, 24 Lion Raisins, Inc. v. United States, 69 Fed. Cl. 32 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Lions Raisins, Inc. v. United States, 51 Fed. Cl. 238 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Logistics Solutions Group, Inc., B-294604.7, 2005 CPD ¶ 141, 2005 WL 1845177 (Comp. Gen. July 28, 2005) . . . . 17, 25 MVM, Inc. v. United States, 46 Fed. Cl. 126 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 32, 33 Mike Hooks, Inc. v. United States, 39 Fed. Cl. 147 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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Minor Metals, Inc. v. United States, 38 Fed. Cl. 379 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 M.W. Kellogg Co. v. United States, 10 Cl. Ct. 17, 23 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Northrop Gruman Info. Tech., Inc., B-295526, et. al., 2005 CPD ¶ 45, 2005 WL 735939 (Comp. Gen. Mar. 16, 2005) . . . . 31 OAO Corp. v. United States, 49 Fed. Cl. 478 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 PGBA, LLC v. United States, 389 F.3d 1219 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38, 42 Park Tower Mgmt., Ltd. v. United States, 67 Fed. Cl. 548 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Redland Genstar, Inc. v. United States, 39 Fed. Cl. 220 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SEI Group, Inc., B-299108, 2007 CPD ¶ 35, 2007 WL 416047 (Comp. Gen. Feb 6, 2007) . . . . . . . . . . . 13 S.K.J. & Associates, Inc. v. United States, 67 Fed. Cl. 218 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Sanders v. United States Postal Serv., 801 F.2d 1328 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Satellite Servs., Inc., B-288848.3, 2003 CPD ¶ 88, 2003 WL 21048768, at *6 (Comp. Gen. Apr. 28, 2003) . . . . . . . . . . . . . . . . . . . . . passim Scheuer v. Rhodes, 416 U.S. 232 (1974), overruled on other grounds by, Harlow v. Fitzgerald, 47 U.S. 800 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Sierra Military Health Serv. v. United States, 58 Fed. Cl. 573 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Southwest Marine, Inc., B-229596, 88-1 CPD ¶ 22, 1988 WL 226887 (Comp. Gen. Jan. 12, 1988) . . . . . . . . . . 29 Sperry Corp., 65 Comp. Gen. 715 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

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Tech Systems, Inc. v. United States, 50 Fed. Cl. 216 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15 Thompson v. Cherokee Nation of Oklahoma, 334 F.3d 1075 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 VSE Corp., B-290452.2, 2005 CPD ¶ 111, 2005 WL 1396999 (Comp. Gen. Apr. 11, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 30, 31 Williams v. United States, 71 Fed. Cl. 194 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Zenith Radio Corp. v. United States, 710 F.2d 806 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 STATUTES AND REGULATIONS 5 U.S.C. § 702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 5 U.S.C. § 706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11 10 U.S.C. § 2461 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 33, 34 28 U.S.C. § 1491(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 31 U.S.C. § 1341(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 31 U.S.C. § 1350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 48 C.F.R. § 1.602-2(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 48 C.F.R. § 3.101-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 48 C.F.R. § 14.402-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 48 C.F.R. § 15.206(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 48 C.F.R. § 15.306(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 48 C.F.R. §15.503(b)(1)(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 48 C.F.R. § 52.207-2(c) (Feb 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 44 48 C.F.R. § 52.215-1(f)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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48 C.F.R. § 52.249-6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 National Defense Authorization Act For Fiscal Year 2006, Pub. L. No. 109-163, 119 Stat. 3136 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Department of Defense Appropriations Act, Pub. L. No. 110-116, 121 Stat. 1295 (2007) . . . . 35 National Defense Authorization Act For Fiscal Year 2008, Pub. L. No. 110-181, 122 Stat. 3, (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS BID PROTEST RKR JOINT VENTURE, LLC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 08-62C (Judge Williams)

DEFENDANT'S MOTION TO DISMISS, AND IN THE ALTERNATIVE, CROSS-MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD AND RESPONSE TO PLAINTIFF'S PARTIAL MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD Pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), defendant, the United States, respectfully requests the Court to dismiss the portion of the complaint of plaintiff, RKR Joint Venture, LLC ("RKR"), that challenges the decision of the United States Air Force ("Air Force") to cancel the solicitation at issue, for lack of subject matter jurisdiction upon the ground that RKR has not brought an action objecting to a solicitation, proposed award, award or violation of statute or regulation related to a procurement pursuant to 28 U.S.C. § 1491(b)(1). Additionally, we respectfully request that the Court dismiss the rest of RKR's complaint, which challenges the Air Force's evaluation of proposals and tentative decision to implement the Most Efficient Organization ("MEO") structure in this A-76 procurement, because it is moot in light of the Air Force's cancellation of the solicitation. Even if RKR could satisfy the jurisdictional requirements of 28 U.S.C. § 1491(b)(1), the administrative record supports the Air Force's decision to cancel the solicitation. Thus, we alternatively request that the Court grant our motion for judgment upon the administrative record

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pursuant to RCFC Rule 52.1(b) and deny RKR's partial motion for judgment upon the administrative record. STATEMENT OF THE ISSUES 1. Whether this Court possesses jurisdiction to entertain RKR's challenge to the cancellation when it is not objecting to a solicitation, proposed award, award or violation of statute or regulation related to the procurement. 2. 3. Whether the Air Force's decision to cancel the solicitation was rational. Whether RKR's challenge to the Air Force's evaluation of proposals and tentative decision to implement the MEO structure in this A-76 procurement is moot because the Air Force has cancelled the solicitation. 4. Whether RKR is entitled to any relief, at this time, in the event that the Court determines that the cancellation was irrational. STATEMENT OF FACTS1 I. The Solicitation And A-76 Study On February 19, 2003, the Air Force initiated an A-76 cost study in order to obtain base operating support services at Keesler Air Force Base in Mississippi ("Little BOS study" or "study"). AR 1728. On March 14, 2003, the Air Force issued Solicitation No. F41689-02-R0049 for these services ("Little BOS solicitation" or "solicitation"). Id. at 1. The solicitation included communications and information ("IT") services, multimedia services and publishing

The Government would ordinarily include a combined statement of facts and counterstatement of facts in its cross-motion for judgment upon the administrative record. See RCFC 52.1(b). In this case, however, since RKR has submitted a separate and extensive statement of facts that contains numerous inaccuracies and statements requiring clarification, the Government is filing a separate counter-statement of facts in response to RKR's statement of facts. 2

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management services. Id. at 78-79. The communications and IT function and publishing management function are currently being performed by the Air Force's military and civilian employees in the 81st Communications Squadron, while the multimedia services function is being performed by a contractor. See id. at 1678-79, 1795. For the communications and IT function, offerors were expected to meet the requirements in Section 7.1 of the performance requirements document ("PRD"), which contained the description of services a contractor would be expected to perform. Id. at 144-53, 1154. Initially, Section 7.1 of the PRD referenced a NOSC-centric initiative, which the Air Force was intending to implement at Keesler AFB. Id. at 1154. The NOSC-centric initiative, known as the Air Education and Training Command ("AETC") Network Control Center Reengineering ("NCC Reengineering"), would have removed a portion of the communications and IT support workload from the Network Control Center, to a more centralized Major Command ("MAJCOM") Network Operations and Security Center ("NOSC") within AETC, the major command of the Air Force that governs Keesler Air Force Base.2 See id. at 1347, 1350. A limited number of personnel would remain at Keesler AFB to perform "touch maintenance," which are actions performed at the base by a Network Control Center technician, for devices managed by a centralized NOSC. Id. at 1347.

NCC Reengineering has been replaced by a more centralized, Air Force-wide, "AFNETOPs" initiative. Id. at 1410. AFNETOPs differs from NCC reengineering in that the Keesler network would be managed through one of two centralized "I-NOSCs," rather than the AETC (MAJCOM) NOSC. Id. at 1359. NCC Reengineering became the foundation for the AFNETOPs transformation, although the AETC technical analyst noted that changes to baselevel services, based upon NCC Reengineering in its April 2002 form, were not as substantial as changes to base level services based upon AFNETOPs. Id. at 1350. 3

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Prior to offers being submitted, the solicitation was amended to remove the NOSCcentric initiative from Section 7.1 of the PRD "due to funding and manning issues that have halted its implementation." Id. at 1154. The Air Force did retain a reference to NCC Reengineering in Section 7.4 of the PRD, i.e., the "General Information" section. Id. at 168-69, 1154. Offerors, however, were instructed that the NOSC-centric initiative was not a part of the solicitations requirements because "Section 7.1 contains the requirements that the service provider must meet and section 7.4 simply offers insight into the Air Force's future plans that may be of interest to the Service Provider." Id. at 1154. The Little BOS study was conducted pursuant to the old, pre-2003, A-76 Circular. E.g., id. at 772. Under this version of the Circular, the Air Force Audit Agency, acting as the Independent Review Office, evaluated the MEO and certified that the MEO proposal met the requirements of the amended solicitation, and the Source Selection Authority determined the MEO met the same level of performance as the "competitive private sector offer" (RKR's proposal) he had selected for the cost comparison. See id. at 829, 2111-41. In approximately August 2005, the Air Force notified offerors that RKR was the contractor selected to compete against the Air Force's MEO, but that the results of the cost study favored the MEO. Id. at 829, 1968-2068. The post-study activities, such as public review, were postponed due to Hurricane Katrina in September 2005 and did not resume until approximately January 2007. Id. at 2142. After its final debriefing, RKR filed an administrative appeal, which was denied on May 23, 2007 by the administrative appeal authority, Major General John W. Maluda. Id. at 1115-18. On June 7, 2007, RKR filed a protest with the Government Accountability Office ("GAO"). Id. at 456-759, 1027-1341.

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II.

Course of Proceedings At GAO After the Air Force examined RKR's GAO protest, it determined that the best course of

action was to take corrective action. Id. at 770, 772-88, 942-48. On June 25, 2007, Brigadier General Martin T. Smoot, Jr., the Director of Manpower, Organization and Resources (AF/A1M) wrote to the Director of Manpower and Personnel at AETC. Id. at 1025. General Smoot advised AETC that he planned to recommend the cancellation of the solicitation and that the MEO not be implemented. Id. General Smoot also advised that they would consider the functions under study for a future A-76 competition once the AFNETOPs transformation is implemented and at final operational capacity at Keesler AFB. See id. On June 27, 2007, AETC wrote back agreeing with the proposed course of action. Id. at 1342. On July 5, 2007, Brigadier General K.C. McClain, Acting Deputy Chief of Staff for Manpower and Personnel (the AF/A1), decided to cancel the Little BOS decision (tentative decision to implement the MEO), recommended the AETC contracting officer cancel the solicitation and noted that the Air Force did not envision recompeting the functions until the AFNETOPs transformation was complete at Keesler AFB. See id. at 1024. In July 2007, in two letters to the GAO, the Air Force stated that it intended to take corrective action by not implementing the MEO and cancelling the solicitation. Id. at 770, 77288. In its July 9, 2007 letter to the GAO, the reasons listed by the Air Force were: 1) an ambiguity in the solicitation regarding the Air Force's plans to shift to a more centralized approach to information technology services ("AFNETOPs"); 2) the need to make revisions to the period of performance, wage rate determinations, information technology and tax rates due to the delay caused by Hurricane Katrina; 3) concern over whether reopening and amending the

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solicitation would violate the Defense Appropriations Act and Anti-Deficiency Act; 4) problems with reviving use of the pre-2003 A-76 procedures in 2007 or later without obtaining OMB extension of the approval that expired in September 2005; and 5) the need to use new mandatory source selection criteria. Id. at 772-74. On July 30, 2007, the GAO sought additional information from the Air Force regarding its reasons for the proposed cancellation. Id. at 938-41. On August 2, 2007, the Air Force responded to the GAO's request with a memorandum from Major General William T. Lord, Director of Cyberspace Transformation and Strategy in the Office of Warfighting Integration and Chief Information Officer. Id. at 947. General Lord explained that the AFNETOPs transformation had changed 57 percent of the requirements in the solicitation and that the solicitation no longer met the Air Force's needs. Id. Based upon this statement, the GAO determined that the Air Force's proposed cancellation was reasonable and dismissed RKR's protest. Id. at 993-97 III. Course of Proceedings At This Court And The Contracting Officer's Cancellation Decision On August 24, 2007, RKR filed an action in this Court challenging the reasonableness of the proposed cancellation and the reasonableness of the evaluation of bids, which resulted in the tentative decision to implement the MEO in August 2005.3 On September 21, 2007, the Government filed a motion to dismiss because: 1) RKR's challenge to the cancellation was not ripe since the contracting officer had not yet determined to cancel the solicitation; and 2) RKR's

On August 22, 2007, the GAO notified the parties that it intended to dismiss RKR's protest. RKR filed its complaint in this Court on August 24, 2007. The GAO then issued its written decision dismissing RKR's complaint on August 29, 2007. Id. at 993-97. 6

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challenge to the evaluation of bids was moot, since the Air Force had decided not to implement the MEO based upon the solicitation in its form at the time. After several discussions with the Court, the parties agreed that they would stay the case, until after the contracting officer issued a decision regarding cancellation. On January 7, 2008, the contacting officer issued a determination and findings that cancellation was appropriate. Id. at 1016-21. The decision to cancel was based upon numerous changes to the requirements of the Air Force and the solicitation, including: 1) changes stemming from the AFNETOPs transformation, as well as other changes Headquarters Air Education and Training Command ("HQ AETC") is making to equipment and manpower requirements; 2) the performance period was originally scheduled for October 2006, but, now, could not start any earlier than October 2008; 3) wage rates and inflation factors must be updated for the new anticipated performance period; 4) Section M of the solicitation did not contain the "mission impact" source selection criterion required by 10 U.S.C. § 2461, as amended in 2006; 5) the property list in the solicitation had changed due to changes in information technology. Id. at 1017-18. The changes to the PRD were so significant that the contracting officer believed that the he could not simply adjust the prices of the MEO to reflect these changes, but would be required to amend the solicitation and re-open discussions with all offerors. Id. at 1019. Also, the contracting officer determined that the changes were so significant that they exceeded what prospective offerors reasonably could have anticipated and, therefore, cancellation was required pursuant to 48 C.F.R. § 15.206(e). Furthermore, even if cancellation was not required pursuant to 48 C.F.R. § 15.206(e), the substantial changes made it prudent to cancel the solicitation because: 1) it would allow the most number of bidders to participate in the competition; 2) there

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was "substantial concern that reopening discussions and the degree of amendments needed to this solicitation would violate the time barriers in Section 8021 of the Defense Appropriations Act for Fiscal Year 2008 (Public Law 110-116)," as well as the Anti-Deficiency Act; and 3) reopening competition would require the solicitation to be converted to the procedures under the new May 2003 OMB Circular A-76. Id. at 1020-21. On January 25, 2008, the Air Force issued an amendment cancelling the solicitation. Id. at 1611. On January 23, 2008, in light of defendant's still pending motion to dismiss and argument that jurisdiction attaches at the time of the complaint, see GAF Bldg. Materials Corp. v. Elk Corp., 90 F.3d 479, 483 (Fed. Cir. 1996), the parties agreed that RKR would voluntarily dismiss its suit, without prejudice. On January 29, 2008, RKR filed this action, challenging the cancellation of the solicitation and, notwithstanding that cancellation, also challenging the evaluation of bids that resulted in the tentative decision to implement the MEO in August 2005. SUMMARY OF THE ARGUMENT This Court does not possess jurisdiction to entertain RKR's complaint that the Air Force's cancellation decision was irrational because RKR has not alleged a violation of statute or regulation. Even if this Court possessed jurisdiction to entertain RKR's challenge to the cancellation, the administrative record supports the Air Force's decision to cancel the solicitation, based primarily upon a significant change in requirements, due largely to AFNETOPs, a NOSC-centric initiative. RKR's argument is essentially that the requirements of the solicitation included a similar NOSC-centric initiative, but offerors were not supposed to base their bids upon a NOSC-centric environment. RKR's argument is neither logical nor supported by the administrative record. Based upon the NOSC-centric initiative's uncertain

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future, the Air Force removed all references to the initiative from Section 7.1 of the PRD. The Air Force also explicitly stated that Section 7.1 of the PRD contained the communications and IT requirements of the solicitation. Therefore, the solicitation's requirements did not contain a NOSC-centric initiative and it was rational to cancel the solicitation based upon a change in requirements. Even if cancellation was not rational, in and of itself, the contracting officer rationally determined that he was required to amend the solicitation and that amending the solicitation, seeking new proposals from offers, and preparing a new MEO to meet the solicitation's new requirements, would likely violate Section 8021 of the Defense Appropriations Act and the AntiDeficiency Act. If the Court determines that it does not possess jurisdiction to entertain RKR's challenge to the cancellation, or that the cancellation has a rational basis, then the Court must also dismiss RKR's challenges to the cost comparison and tentative decision to implement the MEO. Even if the Court determines that the cancellation does not have a rational basis, it still may not award RKR any relief, at this time, because RKR has not proven prejudice, nor an entitlement to injunctive relief. ARGUMENT I. Standard Of Review There are three legal standards applicable to the Court's consideration of this matter. The first is the standard by which the Court must consider the Government's motion to dismiss for lack of jurisdiction. The second is the standard of review, codified at 28 U.S.C. § 1491(b)(4), by which the Court is to judge the substance of the challenged agency action in bid protests. This

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statutory provision, which incorporates the "Scope of Review" provision of the Administrative Procedure Act, 5 U.S.C. § 706 ("APA"), essentially codifies the standards that this Court traditionally has applied in its long-standing line of precedent in bid protest matters. Mike Hooks, Inc. v. United States, 39 Fed. Cl. 147, 154 (1997). The third is the standard by which the Court must consider the motion for judgment upon the administrative record filed by the United States. Application of these standards establishes that the United States should prevail as to all aspects of this matter. A. Standard For Motion To Dismiss

In considering a motion to dismiss for lack of jurisdiction, the Court must accept as true the complaint's undisputed allegations of fact and construe the facts in the light most favorable to the plaintiff. Williams v. United States, 71 Fed. Cl. 194, 197 (2006) (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by, Harlow v. Fitzgerald, 47 U.S. 800 (1982)). As the plaintiff, however, RKR generally bears the burden of establishing jurisdiction for the Court to entertain its complaint. Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed. Cir. 1998) (quoting Hart v. United States, 910 F.2d 815, 817 (Fed. Cir. 1990)).4 Unless the undisputed facts reveal a basis upon which the non-moving party may prevail, the Court must grant a motion to dismiss. Williams, 71 Fed. Cl. at 197 (citing Scheuer, 416 U.S. at 236). "[C]onclusory allegations unsupported by any factual assertions will not withstand a motion to dismiss." CC Distrib., Inc. v. United States, 38 Fed. Cl. 771, 775 (1997) (quoting Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981)).

However, it appears that the burden of demonstrating mootness rests upon the defendant. CCL Serv. Corp. v. United States, 43 Fed. Cl. 680, 689 (1999) (citing County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979)). 10

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B.

Standard For Procurement Challenges

Judicial review of the agency's actions in bid protest cases is not a de novo proceeding; rather, the scope of the review is limited to the administrative record. The proper standard of review is whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law based solely upon the administrative record. 28 U.S.C. § 1491(b)(1), (4); 5 U.S.C. § 702, 706(2)(A); Impressa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). The Court must consider whether the decision was based upon consideration of the relevant factors and whether there has been a clear error in judgment. Beta Analytics Int'l, Inc. v. United States, 67 Fed. Cl. 384, 394 (2005). In determining whether the agency's action was arbitrary or capricious, the scope of the Court's review is very limited. Cincom Sys., Inc. v. United States, 37 Fed. Cl. 663, 671 (1997). In reviewing the agency's procurement decisions, the Court should recognize that the decision is entitled to a "presumption of regularity," see Impressa, 238 F.3d at 1338 (citations omitted), and that the Court should not substitute its judgment for that of the agency. Redland Genstar, Inc. v. United States, 39 Fed. Cl. 220 (1997); Cincom, 37 Fed. Cl. at 672; See also M.W. Kellogg Co. v. United States, 10 Cl. Ct. 17, 23 (1986) (holding that "deference must be afforded to an agency's . . . procurement decisions if they have a rational basis and do not violate applicable law or regulations"). Thus, the disappointed bidder "bears a heavy burden" and the procurement officer is "entitled to exercise discretion upon a broad range of issues confronting [him]." Impressa, 238 F.3d at 1332 (citations omitted). This burden "is not met by reliance on [the] pleadings alone, or by conclusory allegations and generalities." Bromley Contracting Co. v.

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United States, 15 Cl. Ct. 100, 105 (1988); see also Campbell v. United States, 2 Cl. Ct. 247, 249 (1983). Review of a decision to cancel a solicitation is extremely deferential. See Cygnus Corp. v. United States, 72 Fed. Cl. 380, 384 (2006). "The procuring agency need only provide `a coherent and reasonable explanation of its exercise of discretion and the disappointed bidder bears a `heavy burden' of showing that the award had `no rational basis.''" Id. (quoting Impresa, 238 F.3d at 1333). The agency's decision should not be disturbed unless it is "wholly without reason." Id. (quoting TRW, Inc. v. Unisys Corp., 98 F.3d 1325, 1327 (Fed. Cir. 1996)). The protestor "must do more than identify circumstances where the procuring agency made a mistake; it must establish that such a mistake was so excessive as to fall outside the decisionmaker's ambit of discretion." Id. This Court and its predecessors, as well as the GAO, have consistently acknowledged that agencies enjoy wide latitude in decisions to cancel solicitations. In Keco Industries v. United States, the Court of Claims stated "there is no assurance that any bidder would have obtained the award since the Government retains, in its discretion, the right to reject all bids without liability."5 203 Ct. Cl. 566, 492 F.2d 1200, 1206 (1974); accord Aviation Enterprises, Inc. v. United States, 8 Cl. Ct. 1, 19 (1985) (degree of proof required relates to the "latitude given to procurement officials to cancel solicitations"); see also ABF Freight System, Inc. v. United States, 55 Fed. Cl. 392, 409 (2003) ("well settled that the determination of an agency's procurement needs and the best method for accommodating them are matters primarily with the

The Air Force also incorporated 48 C.F.R. § 52.215-1(f)(2) into the solicitation, AR 55, which states that the "Government may reject any or all proposals if such action is in the Government's interest." 12

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agency's discretion"); Satellite Servs., Inc., B-288848.3, 2003 CPD ¶ 88, 2003 WL 21048768, at *6 (Comp. Gen. Apr. 28, 2003) ("In a negotiated procurement, an agency has broad authority to decide whether to cancel a solicitation; there need only be a reasonable basis for the cancellation. This broad grant of authority extends to the cancellation of solicitations used to conduct A-76 cost comparisons.") (citations omitted) (emphasis added).6 An agency "may cancel a solicitation regardless of when the information precipitating the cancellation first surfaces or should have been known, even if the solicitation is not canceled until after proposals have been submitted and evaluated, . . . after contract award, . . . or, as here, after the announcement of a different course of action in response to a GAO protest." Lackland 21st Century Servs. Consol., B- 285938.7, B285938.8, 2001 CPD ¶ 197, 2001 WL 1543693, *4 (Comp. Gen. Dec. 4, 2001) (internal citations omitted). RKR's suggestions that cancellation decisions are "disfavored" in negotiated procurements after a bidder's price has been released, and that such cancellations should be viewed with "skepticism," are unsupported by case law and completely without merit. Pl. Mot. 5, 7. The GAO has held that in "a negotiated procurement, where one or more of the offerors' prices have been revealed, an agency may properly cancel a solicitation where the record contains plausible evidence or reflects a reasonable possibility that a decision not to cancel would be prejudicial to the government or the integrity of the procurement system." SEI Group, Inc., B-299108, 2007 CPD ¶ 35, 2007 WL 416047, at *2 (Comp. Gen. Feb 6, 2007) (citation

Although decisions of the GAO are not binding on this Court, the Court has stated that such decisions can be of great value when considering issues of Federal procurement law. See Park Tower Mgmt., Ltd. v. United States, 67 Fed. Cl. 548, 563 n.29 (2005) (citing Thompson v. Cherokee Nation of Oklahoma, 334 F.3d 1075, 1084 (Fed. Cir. 2003)). 13

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omitted); see also Satellite Servs., 2003 WL 21048768, at *6 (holding that an agency has "broad authority" to cancel a solicitation in a negotiated procurement, even though the cancellation at issue had occurred in the same procedural context as this case, i.e., during a GAO protest after the A-76 cost comparison had been completed). Therefore, the same standard of review applies to protests of the cancellation of negotiated procurements both before and after a bidder's price has been released. C. Standard For Judgment Upon The Administrative Record

Pursuant to RCFC 52.1, this Court reviews the agency's procurement decisions to determine whether they are supported by the already-existing administrative record. The standards applicable to a motion for judgment upon the administrative record differ from those applied in the context of a Rule 56 motion for summary judgment. Bannum, Inc. v. U.S., 404 F.3d 1346, 1355-56 (Fed. Cir. 2005); Lions Raisins, Inc. v. United States, 51 Fed. Cl. 238, 246-47 (2001); Tech Systems, Inc. v. United States, 50 Fed. Cl. 216, 222 (2001) (explaining basis for summary judgment on the administrative record). Unlike a Rule 56 motion, "proceeding under RCFC [52.1] merely restricts the evidence to the agency record . . . ." Bannum, 404 F.3d at 1356. "Thus, the central inquiry on a motion for summary judgment -whether the movant has proved its case as a matter of fact and law or whether a genuine issue of material fact precludes summary judgment -- has no bearing on a review of the administrative record . . . ." Tech Systems, 50 Fed. Cl. at 222; accord Bannum, 404 F.3d at 1356 (holding that RCFC [52.1] requires a different standard of review without the burden-shifting and presumptions required pursuant to RCFC 56).

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Unlike a motion for summary judgment, the question of whether an issue of material fact is disputed has no bearing on a review of the administrative record in a record review case, such as a bid protest. The inquiry, instead, is whether, given all the disputed and undisputed facts, the plaintiff has met its burden of proof that the contracting officer's decision was arbitrary, capricious, or contrary to law. Tech Systems, 50 Fed. Cl. at 222 (citing CCL Serv. Corp. v. United States, 48 Fed. Cl. 113, 119 (2000)). In reviewing the agency's action under this narrow, deferential standard, "the focal point for judicial review should be the administrative record already in existence, not some record made initially by the reviewing court." Florida Power & Light v. Lorion, 470 U.S. 729, 743-44 (1985) (quoting Camp v. Pitts, 411 U.S. 138, 142 (1973)); see also Bannum, 404 F. 3d at 1356 (holding that RCFC [52.1] is designed to provide for expedited trial upon a paper record and that the trial court is required to make factual findings based upon the record evidence). II. This Court Does Not Possess Jurisdiction To Entertain RKR's Challenge To The Cancellation Of The Solicitation Because RKR Has Not And Cannot Prove That It Is Challenging A Solicitation, Proposed Award Or Award, Or That The Air Force Has Violated Any Statutes Or Regulations Related To The Procurement Pursuant to 28 U.S.C. § 1491(b)(1), this court has "jurisdiction to render judgment on an action by an interested party objecting 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 proposed procurement." Therefore, this Court only has jurisdiction to adjudicate claims under its bid protest jurisdiction if the plaintiff is an interested party objecting to at least one of four items: 1) the solicitation; 2) a proposed award; 3) an award; or 4) an "alleged violation of statute or regulation in connection with a procurement or a proposed procurement." 28 U.S.C. § 1491(b)(1). 15

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Because the solicitation has been cancelled, RKR cannot be objecting to a solicitation, proposed award or award.7 Therefore, RKR's allegation of jurisdiction pursuant to 28 U.S.C. § 1491(b)(1) must be based upon a "violation of statute or regulation in connection with a procurement. . ." In Data Monitor Sys., Inc. v. United States, the Court held that for jurisdiction to be based upon a violation of statute or regulation in connection with a procurement, plaintiff's claimed violation must be "rooted in a specific statute or regulation," not merely an allegation that the agency has acted arbitrarily or irrationally. 74 Fed. Cl. 66, 73 (2006). Neither RKR's complaint, nor its motion for partial judgment, alleges a violation of any specific statute or regulation. Rather, RKR argues that the Air Force's cancellation decision lacks a rational basis.8

In its complaint, RKR argues that "an objection to an unlawful non-award is necessarily subsumed within the clause" conferring jurisdiction upon this Court to hear objections to the "award of a contract." Compl. 1. RKR is incorrect. The plain language of 28 U.S.C. § 1491(b)(1), and common sense, demonstrate that in order for an interested party to object to the "award of a contract," the contract must have actually been awarded. In its first motion for leave to supplement the administrative record and reply brief for that motion, RKR did allege that the Government violated 48 C.F.R. §§ 1.602-2(b), 3.101-1 or 15.306(e), by favoring the other offerors over RKR or revealing RKR's price without authorization. Pl. 1st Mot. Supp. 2 n.5; Pl. 1st Mot. Supp. Rep. 3. However, besides the fact that RKR has not alleged violations of these regulations in its later filed amended complaint or partial motion for judgment, all of these allegations are frivolous. The Air Force could not have favored another offeror over RKR by cancelling the solicitation, because by cancelling a solicitation, the Government is removing the possibility of receiving the contract for all offerors. Furthermore, the Air Force did not reveal RKR's price without authorization. Rather, the Air Force revealed RKR's price as required by the Federal Acquisition Regulations and A-76 rules. See 48 C.F.R. § 15.503(b)(1)(iv); 48 C.F.R. § 52.207-2(c) (Feb 1993) (incorporated into solicitation at AR 38); Revised Supplemental Handbook, OMB Circular A-76 (Oct. 1984), Part I, Chapter 1, para. G.2 and Part I, Chapter 3, para. K.1.b (dated March 1996, updated through June 1999) (attached to this brief as Attachment 1). 16
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See, e.g., Pl. Br. 15.9 Therefore, the Court does not possess jurisdiction, pursuant to 28 U.S.C. § 1491(b)(1), to entertain plaintiff's complaint. III. The Decision Of The Air Force To Cancel The Solicitation Was Rational A. Because The Solicitation No Longer Accurately Reflects The Requirements Of The Air Force, The Decision To Cancel The Solicitation Was Rational

This Court's predecessors have considered a decision to cancel a solicitation because the solicitation no longer reflects the Air Force's needs to be per se rational. See, e.g., Am. Gen. Leasing, Inc. v. United States, 218 Ct. Cl. 367, 587 F.2d 54, 59 (1978) ("the Government alleges a reasonable basis for cancelling the solicitation, i.e. a revision in specifications . . ."); Aviation Enterprises, Inc. v. United States, 8 Cl. Ct. 1, 19 (1985) (holding a "cancellation based on overstated specifications to be reasonable.") (citation omitted). The GAO has also repeatedly considered a change in requirements to be a reasonable basis for cancellation. See, e.g., VSE Corp., B-290452.2, 2005 CPD ¶ 111, 2005 WL 1396999, at *5 (Comp. Gen. Apr. 11, 2005) ("A reasonable basis for cancellation exists and cancellation is appropriate when the solicitation does not accurately reflect the agency's requirements"); Logistics Solutions Group, Inc., B-294604.7, 2005 CPD ¶ 141, 2005 WL 1845177, at *2 (Comp. Gen. July 28, 2005) ("A reasonable basis to cancel exists when, for example, an agency determines that a solicitation does not accurately reflect its needs"). Here, the contracting officer determined that the solicitation at issue no longer reflected the Air Force's needs. AR 1017. The most significant change to Air Force's needs is that

"Pl. Br. __" refers to the page number of RKR's partial motion for judgment, filed on July 3, 2008. 17

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AFNETOPs is going to cause a significant portion of the PRD to have to be re-written.10 RKR alleges that, even though bidders were specifically instructed not to base their bids upon a

Based upon the technical analysis he commissioned, the contracting officer determined that there would be a change to approximately 63 percent of the PRD. AR 1017. RKR alleges that workload will only be reduced by approximately 16 percent. Pl. Br. 23 (basing its numbers upon 14 of the 86 positions RKR proposed being eliminated). The percentage reduction is really irrelevant to the outcome of this case. A 16 percent reduction is certainly not a de minimis change in requirements. See MVM, Inc. v. United States, 46 Fed. Cl. 126, 131-32 (2000) (holding, in post-award bid protest, that agency violated 48 C.F.R. § 15.206(a) by not amending the solicitation to reduce the number of district courts for which contractor would provide security from nine to eight, i.e., 11 percent). The cases cited by RKR for the proposition that a 12.3 percent change in requirements or a change in performance period from 690 to 630 days and reduction from eight to two phases, do not require cancellation, are inapposite. Pl. Br. 24 (citing Defense Group, Inc., B-253795, 94-1 CPD ¶ 196, 1993 WL 603568 (Comp. Gen. Oct. 25, 1993); Claude E. Atkins Enterprises, Inc., B-241047, 91-1 CPD ¶ 42, 1991 WL 79363 (Comp. Gen. Jan. 15, 1991)). The question presented to this Court is not whether cancellation is mandatory, but whether cancellation is rational. Like a decision to cancel, a decision not to cancel is entitled to significant deference. See Atkins Enterprises, 1991 WL 603568, *3. As RKR concedes, the real issue in this case, as discussed below, is whether the requirements of the solicitation included a NOSC-centric initiative. Pl. Br. 12. Nevertheless, to the extent clarification of the percentages is necessary, we note that the contracting officer appears to have misunderstood the technical analysis upon which he based his statement that AFNETOPs and other changes require a "change to about 63 percent of the PRD." AR 1017. The technical analysis stated that the 63 percent number was the amount of workload that will be shifted to centralized locations based upon AFNETOPs, for the areas of the PRD affected by AFNETOPs, not the percentage of the PRD that will be affected by AFNETOPs and AETC Help Desk and Telephone Operations consolidation. AR 1346. Of the 166 positions under study (138 in the AETC Communications Squadron, plus 28 positions under contract for multimedia services, AR 1644-45, 1678-79), approximately 76 positions are going to be affected by AFNETOPs and the AETC Help Desk and Telephone Operations Consolidation (70 positions from Data Network Operations and Maintenance (BNCC and INFO PROTECTION), 4 positions from Infrastructure Management and Base Locator Functions (INFO SYS FLIGHT) and 2 positions from Software Support and Services (ADMIN COMM), see AR 1346-49, 1679). Therefore, AFNETOPs and the AETC Help Desk and Telephone Operations Consolidation will require a reduction of closer to 30 percent of the PRD, not 63 percent. If anything, this error is harmless, however, since the cancellation was based, in part, upon significant changes in workload requirements due to AFNETOPs and other consolidation efforts, not a specific percentage of the PRD that will be affected. Whether the percentage is 63, 30 or 16 percent, it is still significant. 18

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change to a NOSC-centric initiative, AR 1154, the NOSC-centric initiative was included as part of the solicitation requirements. RKR's arguments are without merit. 1. The Requirements Of The Solicitation Do Not Include A NOSC-Centric Initiative

In its brief, RKR argued that several provisions of the solicitation demonstrate that the requirements of the solicitation include a NOSC-centric initiative. None of RKR's arguments have merit. First, RKR alleges that several provisions in Section 7.1 of the PRD (7.1.1.1, 7.1.1.1.1, 7.1.1.1.4, and 7.1.4.3 (AR 144-45, 147)), which require the service provider to participate in planning changes to the communications and IT infrastructure at Keesler AFB or implement "configuration changes,"11 account for the NOSC-centric initiative. Pl. Br. 14. RKR is incorrect. In response to a question regarding the solicitation, the Air Force was clear that all references to a NOSC-centric had been removed from Section 7.1 of the PRD, upon which offerors were to base their bids, because "funding and manning issues have halted its implementation." AR 1154. RKR cannot reasonably argue that Section 7.1 of the PRD included requirements based upon a NOSC-centric initiative, when the Air Force explicitly told offerors that Section 7.1 does not contain requirements based upon a NOSC-centric initiative. If Section 7.1 called for reductions in staffing based upon a NOSC-centric initiative, then RKR should have based its bid upon what it anticipated those changes to be, because Section 7.1 set forth the "requirements" of the communications and IT portion of the solicitation. Id. ("Section 7.1 contains the requirements that the service provider must meet"). However, in answering a

We note that "configuration changes" refers to changes to the network configuration, and does not directly reference changes to positions supporting the network. See, e.g., AR 148 (requiring the service provider to perform "initial hardware installation and configuration of network servers, routers, hubs, bridges, repeaters, servers, workstations, and peripherals"). 19

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question regarding the solicitation, the Air Force was clear that references to the NOSC-centric initiative had been removed from Section 7.1 because the future of the initiative was too uncertain to be included and, therefore, offerors should not base their bid upon a NOSC-centric initiative.12 Second, RKR alleges that because a provision in Section 7.4 of the PRD allows the Air Force to direct "configuration changes" (7.4.5 (AR 165)), the Air Force's requirements have not changed based upon AFNETOPs. Pl. Br. 9. RKR misunderstands the nature of Section 7.4 of the PRD. Section 7.4 of the solicitation does not contain the requirements of the solicitation. As the Air Force explained in answering a question regarding the solicitation, "Section 7.1 contains the requirements that the service provider must meet and section 7.4 simply offers an insight into the Air Force's future plans that may be of interest to the Service Provider." AR 1154 (emphasis added). Therefore, by informing offerors that the Air Force could direct "configuration changes" to the network, the Air Force was not including a NOSC-centric initiative within the requirements of the solicitation, especially in light of the fact that the Air Force had specifically removed the NOSC-centric initiative from the "requirements" of the solicitation. Id.

RKR argues that offerors were supposed to bid based upon a "date in time" requirements, but that Section 7.1 of the PRD still included a requirement to adjust to a NOSCcentric initiative. E.g., Pl. Br. 15. RKR's argument is contradicted by the record. It is true that offerors were supposed to bid upon "date in time" requirements, AR 1350, but only to the extent that the requirements in Section 7.1 of the PRD reflected the requirements at the "date in time" of the solicitation. Id. at 1154. Offerors were not specifically instructed to bid upon "date in time" requirements anywhere in the solicitation. Offerors were to base the communications and IT portion of their bid upon Section 7.1 of the PRD, not ignore Section 7.1 of the PRD in favor of some other "date in time" communications and IT requirements of which they were aware. Id. To the extent that the Air Force's requirements changed after award, it could modify the contract so long as the modifications were within the "general scope" of the contract. Id. at 43; see also e.g., AT&T Commc'n, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1205 (Fed. Cir. 1993). 20

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Third, RKR alleges that the fact that the contract was to be a cost-plus contract for two years and then convert to a fixed-price contract after the second option year means that a NOSCcentric initiative was a part of the solicitation requirements. Pl. Br. 12, 19. RKR is, once again, incorrect. As an initial matter, RKR's allegation that the contracting officer "admitted that the solicitation was written as a cost-plus contract with an initial two-year period to determine what the NOSC-centric workload and its costs were going to be" is simply false. Id. at 12. The contracting officer was absolutely clear in his deposition that the provision of the solicitation mandating the conversion to a fixed-price contract had nothing to do specifically with AFNETOPs or any other NOSC-centric initiative. Mortag Depo 116:11-14; 122:19-20. Rather, the clause was based upon the fact that workload data can often be collected more accurately by contractors through the process of contract performance, rather than the agency at the outset of performance. Id. at 119:19-120:4.13 Furthermore, the idea that the conversion clause was inserted into the solicitation to account for a potential change to a NOSC-centric initiative is contradicted by the record. At the time the references to the NOSC-centric initiative were removed from the requirements of the solicitation, the implementation of the NOSC-centric initiative had been halted. AR 1154. Therefore, if this clause was based upon a NOSC-centric initiative, it would have made sense for the Air Force to amend the clause to have the conversion to a fixed price contract occur later than two years into the contract. This, however, was not done. Furthermore, based upon the Air

This same explanation would apply to the Award Fee Plan, which similarly states that after "several years of contract performance, the costs should stabilize, allowing for a conversion to fixed price award fee for the remainder of the contract . . ." AR 232. There is no evidence in the administrative record, even as expanded with depositions conducted by RKR, that this provision was put in place because of AFNETOPs or any other NOSC-centric initiative. 21

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Force's answer to a question regarding the solicitation, in which it stated that implementation of the NOSC-centric initiative had been halted, it was unclear when a NOSC-centric initiative would be implemented or if it would even be implemented during the life of the contract. AR 1154. Therefore, the clause in the solicitation that would have converted the contract from a cost-plus contract to a fixed-price contract after two years did not make a NOSC-centric initiative a part of the requirements of the solicitation. Finally, RKR appears to allege that general language in the PRD in Sections 1 and 2 of the PRD, which require the service provider to adapt to the changing needs of the Keesler AFB and introduce innovations that add customer value, means that the NOSC-centric initiative was included as part of the requirements of the solicitation. See Pl. Br. 19; Pl. SOF 52-55 (citing AR 83-85, 90). To the extent RKR is making such an argument