Free Reply to Response to Motion - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS BID PROTEST ______________________________ SDS INTERNATIONAL, INC. Plaintiff, v. | | | | | |
REDACTED VERSION

USCFC No. 07-881 C Judge Weise

| | | Defendant. | ______________________________| THE UNITED STATES PLAINTIFF'S REPLY TO DEFENDANT AND DEFENDANT-INTERVENOR OPPOSITION TO PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION1

COMES NOW, Plaintiff SDS International, Inc. ("SDS"), by and through undersigned counsel, and pursuant to USCFC Rules 7.2(b), 52.1, and 65 hereby files its Reply to Defendant's Motion for Judgment on the Administrative Record, its Reply to Defendant's Response to SDS's Motion for Preliminary Injunction, and its Reply to Defendant Intervenor-HiPK's Inc. ("HiPK") Opposition to SDS's Motion for Preliminary Injunction. For the reasons stated herein, the Court should grant SDS's Motion for Preliminary Injunction, and order the government to terminate HiPK's contract or, at a minimum, order suspension of performance pending issuance of a permanent injunction in this matter.
All assertions herein are based upon the Administrative Record the government previously filed with the Court (AR Tab __ p. __); the Affidavit of George Gennin (Gennin Aff. ¶ __); the Affidavit of William Bayer (Bayer Aff. ¶ __); the Affidavit of Brian Wages (Wages Aff. ¶ __); the Affidavit of James Tyson ( Tyson Aff. ¶ __); the Affidavit of Robert Sorukas (Sorukas Aff. ¶ __); the document filed as Exhibit 1 to HiPK's Opposition (HiPK Exhibit 1); and the Affidavit of LTC James Sorensen (Sorensen Aff. ¶ __). SDS is filing a separate Motion to Supplement the Administrative Record with the Affidavits prepared by Mr. Bayer, (Exhibit 1), Mr. Gennin (Exhibit 2) and Mr. Wages (Exhibit 3). Neither the Government nor HiPK have yet filed Motions to Supplement the Administrative Record even though their Response briefs rely on extra record documents, such as the Tyson and Sorukas Affidavits. SDS's Reply cites to those documents on the assumption that the Defendant parties will file the appropriate motions.
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I.

SUMMARY OF THE CASE

A.

SDS Meets All Requirements Necessary to Obtain a Preliminary Injunction

SDS is entitled to a preliminary injunction because it meets all four criteria necessary to obtain such relief. SDS can demonstrate a likelihood of success on the merits and irreparable harm in the absence of requested relief. SDS can also demonstrate that both the balancing of hardships to the parties and the public interest tilt in favor of its request. SDS International, Inc. v. United States, 55 Fed. Cl. 363 (2003); see also Erinys Iraq Ltd. v. United States, 78 Fed. Cl. 518, 526 (2007); KSD v. United States, 72 Fed. Cl. 236, 266 (2006). On the merits, the government ignored the Solicitation and the

requirements specified in the Performance Work Statement ("PWS") when it made an award in response to HiPK's non-conforming offer.2

On the balancing of hardships, SDS has suffered and will continue to suffer irreparable injury if it does not obtain a preliminary injunction. The government denied SDS the fundamental right to compete fairly in the acquisition. As a result, SDS has lost and will continue to lose profits that it rightfully would earn from a contract award and may never again be in a position to compete for the services at issue if this matter is delayed further. On the balancing of hardships, this presents a very unusual case because normally the protester can not overcome the Herculean burden of demonstrating that the balance of hardships tilts in favor of short-term relief. In his case, however, SDS can meet the government's immediate need for the services. Thus the government will not be injured by the issuance of a preliminary injunction. HiPK can not demonstrate that it will suffer the level of irreparable injury that would mitigate against preliminary relief in SDS's favor since HiPK will be reimbursed for all costs it has incurred to date under the terms of its contract. HiPK's potential future lost revenues are not a mitigating factor
2

In addition, after award, the government allowed HiPK to substitute and add key staff in contradiction of the key functions clause in the PWS. Finally, there is no evidence in the record that supports the reasonableness of the government's price realism analysis and the assignment of adjectival ratings related to performance risk. 2

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since HiPK was illegally awarded a contract. Furthermore, the public interest dictates that the Court should act because the government has created its own problems through its conduct over the past eight months. The only demonstrated harm to the government stems from a potential loss of Fiscal Year 2007 funds. Even if true, that issue was caused solely by ACA's award to a non-conforming bidder. ACA then compounded its mistake when it ignored several opportunities to correct those mistakes during Fiscal Year 2007.

B.

A Preliminary Injunction is Particularly Appropriate in this Case

The balance of hardships favors resolution of this matter now. A decision on the merits turns on an issue of contract interpretation based upon a record that has already been fully developed. The government claims that it can not suffer any break in the services at issue. The government's position is that the current PWS describes services that meet its needs. If the Court rules that SDS is correct regarding SDS's interpretation of the PWS, and the nonconformance of HiPK's proposal, and it should, then the Court will be presented with the following situation: The innocent party, SDS, was the only party that correctly responded to the PWS. SDS is in position to immediately provide the services at issue. Neither SDS nor the government will suffer any further harm. The Government can look to SDS to provide the services in the short run under the current PWS. If the government believes that the PWS did not meet its long term needs for the services, it can--during the base year of SDS's performance--decide to conduct a new acquisition. It can subsequently revise the PWS and request new offerors. In the short run the government can legally obtain the services at issue by using SDS. 3

B.

SDS's Interpretation of the PWS is Reasonable

The alternative would be for the government to cancel the entire acquisition now and begin an entirely new acquisition. The government is unlikely to take that route given the need for the services. If the government cancels this acquisition, however, it can not simply award a bridge contract to HiPK without conducting a new competition as required under FAR sub-part 6.3. There are at least two offerors, SDS and HiPK, who are available for a new competition and the government would not be able to justify a solesource award. 3

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SDS has presented a reasonable interpretation of the PWS that is based upon a reasonable reading of the PWS as a whole, which is supported by specific language in the PWS. The PWS language required that offerors consider DoD's T2 policy when they prepared their technical approaches and related staffing. All of that language is addressed in Mr. Bayer's Affidavit.

For example, Paragraph 1.14 of the PWS required that the entire DoD training program for which the offerors were providing services adhere to DoD's T2 policy. Even the government has admitted that offerors were required to adhere to that policy and has gone so far as state that the Solicitation is an example of DoD's T2 policy. Paragraph 4.6 of the PWS referenced the June 2004 Training Transformation Implementation Plan (TTIP) as a mandatory directive that offerors were required to consider where appropriate in preparing a technical approach that met the government's needs. The PWS contained detailed functional requirements under the Base Services (e.g., PWS Section 3.1) and Potential Task Orders (e.g., PWS Section 4.3). A number of the PWS functions specified in the Base Services contained references to specific knowledge enablers such as Computer Based Training/Web Based Training (CBT/WBT). Those knowledge enablers further DoD's T2 policy. As demonstrated by Mr. Bayer, however, SDS's interpretation is based upon the specific language under functions specified in the PWS, and not simply the need for SDS to consider broad DoD policy.

In order to provide services at issue and meet the functions specified under certain PWS requirements, offerors were required to provide sufficient staffing to address functions in the PWS that specifically referenced the knowledge enablers. For example, PWS section 3.1.8.1 required that an offeror assist in designing web structures that support CBT/WBT. The offeror was required to offer qualified staff to meet that function. Several PWS functions covering Base Services that are specified in the PWS referenced the knowledge enablers. SDS's technical approach included qualified staffing to meet those Base Services functions while HiPK's technical approach did not.

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HiPK's technical approach also referenced the knowledge enablers, but its proposed staffing and technical approach only promised to address the relevant PWS functions in the event that the government issued Task Orders. The government

recognized a clear distinction between the two technical approaches when it initially evaluated the offerors. In ACA's response to SDS's Agency Protest, ACA specifically noted that the PWS required consideration of DoD's T2 policy, but its position at that time was that that offerors were only required to address T2 when providing the staffing related to Task Orders. Subsequently, ACA (before GAO and now the Department of Justice in this forum) adopted a different interpretation. Now the government maintains that the PWS did not require that offerors propose staffing related to T2 anywhere in their technical approaches. That is not a reasonable interpretation of the PWS because it does not provide any meaning to language in the functions under specific sub-sections of the PWS.4 Those sections described functions that required that the offeror provide services that specifically supported the knowledge enablers, such as the design and construction of web structures that supported CBT/WBT.

In support of its interpretation and current with this Reply, SDS is filing an Affidavit prepared by William Bayer.5 Mr. Bayer presents the Court with background information regarding DoD's T2 policy, a detailed analysis of the PWS language that supports SDS's interpretation and a description of SDS's staffing at issue. The

conclusions contained in Mr. Bayer's Affidavit are supported by the language in the PWS. He specifically discussed the PWS language and how it affected the staffing requirements.6 SDS also is filing an Affidavit of its consultant Brian Wages. Mr. Wages
4

The fact that the government would take that position is ridiculous since the government had already reviewed HiPK's proposal. The proposal repeatedly references the knowledge enablers and contains clear language which established that HiPK also intended to address the knowledge enablers in the potential Task Orders. ACA took that contrived position in FY 2007 when there was still time to take corrective action without jeopardizing funding. A potential loss of FY 2007 is the only uncontroverted harm DoD has been able to articulate in this matter. DoD caused its own problems and it should not be allowed even to raise that issue in regards to the public interest test.
5

The Attached Affidavit prepared by Mr. Bayer is almost identical to the previous affidavit filed with the Court with SDS's Memorandum supporting its request for a preliminary injunction. The difference is that Mr. Bayer's revised affidavit contains precise descriptions of the specific staffing in SDS's technical approach that addressed the knowledge enablers. 5

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reviewed HiPK's proposal and other documentation. He pointed out two specific instances where HiPK clearly intended for its technical approach to address T2 only in reference to services under Task Orders.7 SDS also is filing an Affidavit of its Chief Executive Officer George Gennin on the issue of the balancing of hardships. Specifically Mr. Gennin offers specific un-controverted facts that support SDS's position that it can offer the services at issue immediately upon the Court's issuance of preliminary injunction.

II.

THE MERITS OF SDS'S CASE

A.

SDS's Position on the T2 Issue

SDS was the only offeror whose technical proposal reflected staffing to address all the functional requirements specified in the PWS and the government's Response does not provide support for any other conclusion. SDS's proposal was based upon a

reasonable interpretation of the PWS. SDS offered a staffing approach that addressed the PWS functions and requirements that reflected DoD's T2 policy. The government's

response conceded that the Solicitation mandated consideration of DoD's T2 policy in providing the services at issue. The government asserts that the solicitation is an example of DoD's attempt to implement Training Transformation, and that the offerors were required to "adhere" to that policy (see e.g., Government Response at page 16-"the solicitation at issue in this case represents an example of that implementation; that is the solicitation is an example of Training transformation in action"; see also Government Response at p. 18).

Mr. Bayer's reliance on specific language in the PWS in support of his conclusions contrasts with the conclusions of ACA representative James Tyson, whose affidavit the Government submitted with its Response. Mr. Tyson barely discussed specific language in the PWS, and when he did several of his conclusions are contrary to specific language in the PWS.
7

6

SDS is only offering Mr. Wages' affidavit in support of its position that there was a clear distinction between the technical approaches in the two proposals and the related staffing. ACA already admitted that fact when it responded to SDS's agency protest. SDS recognizes that the Court will not analyze the proposals in ruling on this Motion, nor will it substitute its judgment in place of the Agency. It does not have to engage in either function to find in favor of SDS. It need only decide whether HiPK's proposal was noncompliant, and the record demonstrates that it was non complaint. 6

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The government's position is consistent with SDS's position that offerors who responded to the Solicitation were required to consider the DoD policy initiatives contained in DoD's June 2004 Training Transformation Implementation Plan (TTIP) and DoD's Joint Chiefs of Staff Instruction 3500.01C (CJCSI 3500.01C), since both of those documents were noted as specific directives under Paragraph 4.6 of the PWS. (Bayer Aff. ¶¶ 12-14.) The Government's response, however, mischaracterizes SDS's position regarding T2 and then offers an overly restrictive interpretation of the PWS, which fails to consider specific language in the PWS. The government simply argues that T2

represents DoD policy rather than a specific task. SDS has never maintained that T2 is itself a specific task in the PWS. SDS's position has always been that offerors were required to address the functional requirements described in the PWS. T2 was a

consideration because a number of specific PWS functions referenced the knowledge enablers.

For example, Mr. Bayer's Affidavit asserts that specific functions contained under certain sub-sections of the PWS required that the offerors address T2 in their technical proposals because the clear language in those sub-sections specifically called out key knowledge enablers, initiatives and requirements necessary to implement DoD's T2 policies. (Bayer Aff. ¶¶ 16, 20-28.) Providing the services under those functions

required staffing necessary to implement the knowledge enablers such as services requiring that the offeror the design and construction WBT/CBT tools or assistance in development of learning media for virtual training tools. (Bayer Aff. ¶¶ 34-39.)

SDS prepared both its technical approach and staffing plan in a manner that enabled SDS to address the language that specifically referenced knowledge enablers that the government saw fit to include in the PWS. (Bayer Aff. ¶¶ 40-51.) SDS's technical approach addressed the specific functions necessary to implement the knowledge enablers, and the knowledge enablers furthered DoD's T2 policy. SDS's staffing plan enabled SDS to offer the training services necessary to address the functions at issue. (Bayer Aff. ¶¶ 40-51.) SDS's case is based upon the language of the PWS and its
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positions are supported by the clear language in the PWS. SDS's interpretation provides reasonable meaning to all the language in the PWS, specifically the PWS sub-sections which required that SDS provide services that addressed specific functions necessary to implement the knowledge enablers.

B.

The Government's Position on the T2 Issue

The government's response is based upon Mr. Tyson's affidavit. In contrast to Mr. Bayer, Mr. Tyson barely addresses the specific language in the PWS, and when he attempts to do so, his assertions are inconsistent with the language in the PWS. For example, in paragraph 6, Mr. Tyson describes the knowledge enablers and then boldly asserts:

The Solicitation is very clear in explaining that we use some of these enablers but have no requirement to design code or build new software or hardware applications.

(Tyson Aff. ¶ 6.)

That statement is completely inconsistent with the language under PWS sub-section 3.1.8.1.2, PWS sub-section 3.1.8.1.5, and PWS sub-section 3.1.5.13. Those PWS subsections required information technology development efforts and specifically referenced requirements to design and build web structures, including providing graphics support (3.1.8.1.2) requirements to construct web sites (3.1.8.1.5), and requirements to assist in the development of and integration of learning media for use with virtual training devices (3.1.5.13). (AR Tab 3, pp. 109 & 111; Bayer Affidavit ¶¶ 27-28.) Mr. Tyson does not even address those PWS sections.8

SDS is requesting a hearing on this matter and will make Mr. Bayer available to explain his interpretation of the PWS. We presume that the government will be willing to do the same regarding Mr. Tyson. 8

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Most of Mr. Tyson's Affidavit provides the Court with background information regarding DoD's T2 policy, LVC Training and database management and his opinion that SDS has misinterpreted the PWS requirements regarding SCORM, the purple book and the lack of the need for a modeling and simulation engineer to address PWS sub-section 3.1.5.7. (Tyson Aff. ¶¶ 1-5, 7-10.) Many of those assertions are not even germane to this dispute and others avoid the issue. SDS has never maintained that database management is related to T2. Regardless of whether PWS sub-section 3.1.5.7 required a modeling simulation engineer, or a LVC planner, as specified in SDS's technical approach, that section still required a subject matter expert. (Bayer Aff. ¶¶ 27, 37, 48.) Mr. Tyson's Affidavit does not address the language in the PWS. Mr. Bayer's Affidavit focuses on the language of the PWS.9

C.

HiPK's Position on Training Transformation

HiPK simply adopts the government's position and then maintains that SDS's position requires that the Court "disregard the Army's clear description of the tasks" and "adopt an interpretation of the solicitation that permits the offeror to tell the Army what the Army really meant on a general TTI policy." (HiPK Response at p. 4.) SDS's entire position is based on the clear description of tasks under specific wording of the PWS. What the army "meant" in drafting the PWS is irrelevant. This case turns on the

language of the PWS, and a reasonable interpretation of that language supports the merits of SDS's case. Contrary to HiPK's position, SDS does not maintain that the DoD's June 2004 TTIP imposed "undefined" TTI functions." (See HiPK Response at pp. 6-7.) The PWS defined the functions, and the relevant functions at issue in this matter are the PWS functions that specifically reference the knowledge enablers. Addressing those functions required staffing to support the knowledge enablers.

HiPK also argues that the PWS contains a patent ambiguity that SDS should have raised prior to bidding. HiPK claims that the PWS lists the June 2004 TTIP as both a

9

LTC Sorensen's Affidavit addresses SDS's intent to use a document specialist as an example of excess staffing. (Sorensen Aff. ¶5.) That position has nothing to do with Training Transformation. 9

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mandatory directive and a guidance document. There is no ambiguity and HiPK is relying on two different documents. Paragraph 4.6 of the PWS clearly specifies that the June 9 2004 TTIP is a mandatory directive. (AR Tab 3, p. 136.) The dated document is a directive. The document listed as a guidance document is undated. Those are two different documents.10 They do not create an ambiguity--either patent or latent--

because they can be read together. The undated document specifies DoD policy as guidance to the offerors. The dated June 9, 2004 TTIP is a directive that offerors were required to consider in preparing their technical approaches. . D. Non-compliance Transformation of HiPK's Proposal Regarding Training

HiPK's technical proposal failed to comply with the terms of the Solicitation because it did not offer any staffing to perform at least three specific functions in the PWS that covered the Base Services. Instead, HiPK specified that it intended to perform those functions under future Task Orders. The functions at issue referenced specific knowledge enablers related to the development of virtual training tools in support of learning media (PWS sub-section 3.1.5.13), the design and construction of build web structures (3.1.8.1.2), and construction of web sites (3.1.8.1.5). (AR Tab 3, pp. 109 & 111; see also Wages Aff. ¶¶ 11, 15-17.)11 The PWS specifically required that the offerors devote staff to those functions when providing the Base Services. (Id; see also Bayer Aff. ¶¶ 27, 28, 32-33.) PWS sub-section 3.1.5.13 specifically stated that offerors were required both to maintain virtual training devices such as the Part-Task Trainers, and to assist in the development and integration of learning media for use with such virtual training devices. SDS proposed a Modeling and Simulation Planner (LVC) to address that requirement under the Base Services. (Bayer Aff. ¶ 49.) In contrast, HiPK

specifically stated that it intended to address that requirement in future task orders and stated that it did not intend to develop software upgrades under the Base Services. (Wages Aff. ¶ 11; see also HiPK Response - Exhibit 1, p. 9; AR Tab 25, p. 1777.)
10

SDS counsel made that exact point in the initial status conference when HiPK's counsel first raised this issue. HiPK's counsel knows or should know that these are different documents.
11

Mr. Tyson did not address these PWS sections in his Affidavit. 10

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PWS sub-sections 3.1.8.1 through 3.1.8.5 listed specific functions related to the design and building of web structures and the construction of web sites. Those functions supported distance learning and the delivery of distance learning across the internet. They require that offerors support the development of web based learning tools, including graphics development. (Bayer Aff. ¶¶ 28, 50, 51; see also Wages Aff. ¶ 13.) SDS proposed four positions directly to support those functions under the Base Services. (Bayer Aff. ¶¶ 50, 51.) In contrast, HiPK's technical approach in its proposal does not specify any non-key qualified staff that would actually perform the work to design or construct web structures, let alone provide graphics support. HiPK's proposal simply stated that its ISD Manager would manage the web design and web construction. During the Base Services, HiPK intended to assign the work to its Data Base Manager and would only assign qualified personnel in response to Task Orders. (Wages Aff. ¶¶ 15, 16; AR Tab 25, pp. 1741, 1745-46, 1761-62, 1771, 1784, 1790.)

The critical difference in the two proposals is that SDS's technical approach included staffing to actually perform the work at issue, while HiPK's technical and staffing plan was to initially furnish an ISD Manager and then only staff the requirement when the government issued a Task Order. HiPK's offer was non-compliant because HiPK simply did not propose staff to perform the Base Services. The Solicitation

required a technical approach that identified personnel that would actually perform the functions specified in the PWS. (AR Tab 3, p. 82; Bayer Affidavit ¶ 44.) HiPK failed to meet that requirement.

E.

The Government's Response to SDS's Agency Protest

The Government's original response to SDS's Agency Protest confirms Mr. Wage's conclusions regarding HiPK's technical approach and staffing. ACA admitted that HiPK also addressed T2, but only with reference to potential Task Orders. If this Court concludes that offerors were required to address DoD's T2 policy in the PWS Base Services functions that referenced the knowledge enablers, and it should, then SDS will
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likely prevail on the merits. In response to SDS's agency protest, ACA previously admitted that SDS was the only offeror whose proposal included staffing to address T2 under the Base Services, while HiPK's technical proposal intended to address T2 under task orders related to CBT/WBT (PWS Section 4.3.2) and Virtual Constructive Training (VCT) (PWS Section 4.3.5) (AR Tab 11, pp. 886-88.)12 ACA recognized a significant difference in the two technical approaches when it initially reviewed the two proposals. (Id.; see also Wages Aff. ¶ 6.) SDS offered qualified staffing under the Base Services and HiPK failed to do so.

F.

The Merits of SDS Case-The Link 16 Network Design Engineer and the JICO Communication Specialist Functions

The Government's Response failed to address SDS's allegations that, after award, JID allowed HiPK to substitute different personnel to perform the critical Link 16 Network Design Engineer functions and provide additional personnel to perform the JICO Communication Specialist functions. Mr Gennin's affidavit presented the Court with specific information that, after award, SDS learned the government directed HiPK not to use Mr. Frolen as the Link-16 Network Design Engineer, and also allowed HiPK to supplement its staff by adding Mr. Hap Skandrett to the contract even though Mr. Skandrett was not identified in HiPK's technical proposal. (Gennin Aff. ¶¶ 15-16.)

The Government's Response and Lieutenant Colonel Sorensen's Affidavit failed to address those allegations. Regarding Mr. Frolen, Lieutenant Colonel Sorensen's

Affidavit stated that the Government is satisfied with Mr. Frolen's qualifications and was satisfied with his qualifications when the Government reviewed HiPK's proposal. (Sorensen Aff. ¶ 3.) That is not the point. The issue is whether, after award, HiPK was allowed to replace Mr. Frolen with other individuals who would perform the Link-16 Network Design Engineer functions. If the government did so than it allowed HiPK, who
12

DoJ counsel excoriates SDS for asserting that the government already made a crucial admission on this particular issue. SDS requests that the Court simply read ACA's own conclusions in its response to SDS's Agency Protest. The long standing rule that the Court not substitute its judgment for the judgment of the Contracting Agency does not mean that the Court should disregard a clear admission by the agency regarding its own conclusions over the respective offerors' technical approaches, especially when the agency reached those conclusions during the initial proposal review. 12

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had identified Mr. Frolen as functioning in a key staff member, to violate the key functions clause at paragraph 3.2.7 of the PWS. That clause prohibited substitution of personnel identified as key staff during the first six months of performance (AR Tab 3, p. 116-17.)13 Lieutenant Colonel Sorensen's Affidavit does not even address the allegations concerning Mr. Skandrett.

G.

The Price Realism Issue

The Government's Response does not address SDS's allegations that ACA has never preformed a reasonable price realism analysis in support of the adjectival ratings related to performance risk.14 As a result of the corrective action, ACA increased its IGE from $22,522,271.69 to $24,398,039. (Compare AR Tab 26, p. 1913 with AR Tab 29, p. 1922.) ACA did not change any of the proposal risk ratings that it originally had assigned to HiPK's and SDS's technical approaches (Low Risk) based upon the original IGE. Id. The record does not contain any documentation that JID and/or ACA

conducted any revised price realism in support of those adjectival ratings, despite the fact that HiPK's offer was approximately $1.7 million lower than the revised IGE. Furthermore, after the government revised the IGE, it admitted that HiPK's technical proposal contained fewer positions that the positions reflected in the revised IGE. (AR Tab 29, p. 1923.) The government then concludes without any explanation that HiPK's price was realistic in terms of HiPK's technical solution. That misses the point. The purpose of a price realism analysis is to determine whether the offeror's price is reasonable in comparison to solicitation terms, not in comparison to the offerors own technical approach. Information Sciences Corp. v. U.S., 73 Fed. Cl. 70, 102 (2006).

13

The Court will not substitute its judgment in place of LTC. Sorensen's judgment regarding Mr. Frolen's qualifications. Without doing so, the Court can still conclude that the government violated the key functions clause by allowing HiPK to substitute key personnel after award in contravention of the requirements specified in that clause.
14

Government counsel's only response on his issue was a reference to a statement made by the undersigned during the preliminary status conference. At that point in time SDS had not even been provided with any documentation regarding ACA's corrective action pertaining to price realism or the agency's revision of the IGE. The record now shows that the agency did increase the IGE but the Agency never prepared a new price realism analysis that reflected the increased IGE. 13

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Furthermore, the agency record contains no explanation of the adjectival ratings applicable to performance risk. ACA initially assigned both HiPK and SDS low risk ratings when HiPK's price was very close to the IGE and SDS's price was over $5 million above the IGE. Then the government revised the IGE. As a result, HiPK's offer was approximately $1.7 million lower than the revised IGE and its technical approach reflected fewer positions than the government apparently used in recalculating the IGE. The record contains no explanation as to how the government determined that HiPK's technical approach and its price still warranted a low risk rating. Without some minimal explanation, the Court can not determine that the ratings had any rational basis.

III.

IRREPERABLE HARM TO SDS

SDS meets the second factor that this court must consider in issuing a preliminary injunction. SDS will suffer irreparable harm in the event that the Court does not order ACA to suspend HiPKs' performance and/or terminate the contract illegally awarded to HiPK. SDS is losing over $30,000 per day in profits that it should be earning had ACA properly conducted this acquisition. (Gennin Aff. ¶ 5.) The irreparable harm to SDS goes beyond a simple loss of profits. In the long run, SDS may never again have the ability to compete for the services at issue without expending resources necessary to reconstitute the team it formed initially to compete for this acquisition. (Gennin Aff. ¶¶ 6-7.) That potential injury is exacerbated the longer this matter remains unresolved. Id. Furthermore, the government denied SDS an opportunity to compete on a level playing field by making an illegal award to HiPK in response to HIPK's non-conforming technical proposal. Thus SDS has already suffered an irreparable injury in the form of lost profits and the lost opportunity to compete on a level playing field.

The Court previously has found that a combination of lost profits and a lost opportunity to fairly compete constitutes sufficient irreparable injury in support of an injunction, Geo-Seis Helicopters, Inc. v. United States, 77 Fed. Cl. 633, 647. The record before the Court in Geo-Seis Helicopters was analogous to this case since the illegal award in Geo-Seis Helicopters was based upon a proposal which the Court determined
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should never have been accepted for purposes of award. Id at pp. 645, 646.15 In GeoSeis Helicopters, the court recognized its limited ability to award monetary damages to compensate a contractor for harm caused by illegalities in the acquisition. In discussing irreparable injury, the Court stated:

In determining whether Geo-Seis will suffer irreparable harm if the court denies the injunctive relief requested, this court begins with the question whether Geo-Seis has an adequate remedy at law. Although the "mere loss of money does not qualify as irreparable harm if the party can be made whole through money damages," Hawaiian Dredging Constr. Co. v. United States, 59 Fed.Cl. 305, 317 (2004), by statute, in a bid-protest case, the court is very constrained in the monetary relief it can grant. See 28 U.S.C. § 1491(b)(2) ("any monetary relief shall be limited to bid preparation and proposal costs"). Thus, in a bid protest, "[a] lost opportunity to compete on a level playing field for a contract ... has been found sufficient to prove irreparable harm." Seattle Sec. Servs., Inc. v. United States, 45 Fed.Cl. 560, 571 (2000); see also Hospital Klean, 65 Fed.Cl. at 624 ("Here, absent injunctive relief, [plaintiff] will lose the opportunity to earn the profit it would have made under this contract."). Given the Sealift Command's Contracting Officer's contravention of FAR § 52.215-1 (c)(3)(ii)(A) and the Command's erroneous award of a contract to Presidential, Geo-Seis has demonstrated that this court's failure to enjoin the Command's performance of the contract with Presidential would cause Geo-Seis irreparable harm

Id. at 647.

The protester in Geo-Seis Helicopters ultimately was unable to obtain a permanent injunction because the government was able to demonstrate that the injunction would have impeded the Government's ability to obtain the services at issue on a timely basis. Given SDS's ability to begin performance, the government can not make that demonstration in this case. 15

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There is no question that SDS can demonstrate an irreparable injury necessary to meet the second test. The Court still must, however, balance the hardships to the parties, and then determine whether the public interest favors granting injunctive relief. PGBA, LLC v. United States, 389 F. 3d 1219, 1228, 1229 (Fed. Cir. 2004); Geo-Seis Helicopters, Inc. v. United States, 77 Fed. Cl. 633, 639, 647. SDS can meet both tests.

IV.

BALANCE OF HARDSHIPS

A.

SDS versus HiPK

The balance of hardships to the parties, SDS, HiPK and the government favors granting injunctive relief. Balancing the potential future monetary hardship to SDS and HiPK in the form of lost profits or revenues is not determinative. In the event that the Court grants relief, HiPK does not earn revenue from future performance. The same hardship applies to SDS in the event that the Court denies the relief. (Compare Gennin Aff. ¶ 5 -$30,000 per month in lost profits with Sorukas Aff. -$20,000 per day in lost revenues.)16 Mr. Sorukas's Affidavit describes a number of costs HiPK has incurred to date, or will incur, in the event that the Court grants equitable relief. (Sorukas Aff. ¶¶ 6, 9, 12, 13, 14.) Those costs do not mitigate against equitable relief. HiPK can recover all those costs either through a termination for convenience settlement or a modification to its price under the Suspension of Work clause. The other injuries cited by Mr. Sorukas, such as a disruption in performance, inability to perform, and loss of good, do not mitigate against equitable relief, since HiPK should never have received the award in the first place. Unlike SDS, HiPK failed to properly bid the contract. HiPK's potential injuries pale in comparison to SDS, which was the only offeror that properly bid the contract, and is now suffering as a result.

B.
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SDS versus HiPK

This comparison presumes, however, that Mr. Sorukas's statement regarding lost revenues is even remotely accurate. It is highly suspect since $20,000 per day in lost revenues extrapolates to annual revenues of approximately $4.8 million, while in fact HiPK's fixed prices for the Base Services represented a contract with an annual price of approximately 3.1 million. (AR Tab 25, p. 1462.) 16

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The balance of hardships between SDS and the Government also favors granting injunctive relief. The Government will not suffer any hardship other than the possible loss of fiscal year 2007 funds. Most importantly, the Court's issuance of a preliminary injunction will not result in a disruption of services. That fact is demonstrated by a comparison of the affidavits submitted by Mr. Gennin and Lieutenant Colonel Sorensen.

Lieutenant Colonel Sorensen asserts that any break in contractor support will negatively impact JID's performance, and he relies upon the need for JID to support an exercise scheduled for late February. (Sorensen Aff. ¶ 6.) Those facts do not mitigate against granting a preliminary injunction because SDS is still in a position to begin performance immediately. There will be little or no substantive break in service because SDS is prepared to be at ninety five percent (95%) capacity within three business days, and at ninety eight percent (98%) capacity within ten business days. SDS can meet the JID timeframe discussed by Lieutenant Colonel Sorensen. Mr. Gennin's Affidavit

explains SDS's reasonable procedure for quickly transitioning back in JID. For example, the Joint Interface Control Officer (JICO) instructors and Subject Matter Experts required under sub-paragraph 3.1.2.1.1 of the PWS are former SDS employees who can immediately shift from HiPK to SDS. (Gennin Aff. ¶ 9.) Several other key personnel, such as SDS's Project Manager, are SDS employees located in Atlanta that can also immediately begin performance. (Gennin Aff. ¶ 10.) A third key position is already at JID as a member of HiPK's team and his company will make him available to SDS. Id.

JID will not suffer any hardship regarding its ability to obtain the services at issue. The only other injury asserted by Lieutenant Colonel Sorensen concerns a

potential funding loss. That particular injury, even if true, was caused directly by the government's own conduct in conducting this acquisition. Loss of funds under the circumstances in this case should not mitigate against granting the preliminary injunction. On the contrary, the circumstances surrounding that particular issue favor issuing an injunction in the public interest.

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V.

The Public Interest

The potential loss of funds, even if true, was caused solely by JID's own mistakes, including its repeated failure to correct those mistakes on a timely basis. The record demonstrates that ACA ignored numerous opportunities to correct those mistakes. Since there will be no break in service, this Court, by serving the public interest, should not allow the government to benefit from its own conduct.

It is fundamental that awards are made on the basis of the requirements specified in a solicitation. If the Court rules in favor of SDS on the merits, it will do so based on its conclusion that JID initially awarded a contract to a party that did not comply with the Solicitation. JID should have reached that conclusion on its own during the evaluation process. It made a mistake when it did not do so. Then, however, JID twice had ample opportunity to correct that error during Fiscal Year 2007, when SDS made the same arguments regarding the staffing necessary to address DoD's T2 policies that it has made in this action. First, JID and/or ACA could have taken corrective action in response to the Agency protest. It chose not to do so, even though its own decision referenced the same FTE staffing positions that have been at issue throughout this matter (i.e., ADL programmers and WBT/CBT specialists). In its own decision, ACA recognized that T2 was an issue, but ACA asserted it was only applicable to Task Orders. When SDS then sought relief at GAO, again in Fiscal Year 2007, SDS provided a reasonable interpretation of the Solicitation, the same interpretation it has presented in this forum. ACA could have taken corrective action at that point in time.

Instead, ACA responded with an interpretation that the offerors were not required to consider T2 under any part of their technical approaches, including the staffing applicable to Base Services and staffing applicable to potential Task Orders. ACA took that new, completely contrived position despite the earlier response to SDS's Agency Protest. ACA took that position despite the fact that HiPK's proposal also had addressed the knowledge enablers, but only in response to Task Orders. Before this forum, the Government has adopted the same position regarding the interpretation of the
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Solicitation. According to the government, offerors were not required to address T2 in their technical approaches and qualified staffing, even under the PWS functions related to design and construction of web structures and web pages. That interpretation has never been reasonable, and the government basically has stonewalled from the very beginning. Now it asks the Court to deny equitable relief because it may lose FY 2007 funding. The Court should reject that argument in the public interest, and it should do so without any hesitation.

Under the public interest test, the Court balances the overriding public interest in preserving the integrity of the procurement process when awarding a contract, while at the same time assuring that the Department of Defense can receive the services it needs on a timely basis. Geo-Seis Helicopters, Inc. v. United States, 77 Fed. Cl. 633, 639, 647; Hospital Klean v. United States, 65 Fed. Cl. 624. Normally, equitable relief is not available because the government, and DoD in particular can not suffer delays in performance once a contract has been awarded. See e.g., Geo-Seis Helicopters, Inc. v. United States, 77 Fed. Cl. 633, 639, 647 (denying injunctive relief but awarding bid preparation costs upon demonstration that the government would suffer a delay in services). That is not the situation in this case since SDS can offer the services. The only factor offered by the government is the loss of funding. That factor can not mitigate against the issuance of an injunction since it was due solely by the government's failure to correct its own mistakes.

VI.

Conclusion

For the reasons specified herein, SDS respectfully requests that the Court grant the requested relief and enter judgment in favor of the Plaintiff.

Respectfully submitted,

Date: ____________

By:

____________________________
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Christopher M. Johnson, Centre Law Group, LLC 1953 Gallows Rd, Suite 650 Vienna, VA. 22102 (703) 288-2800 (703) 288-4868 (fax) Brian C. Caney-of Counsel Counsel for Plaintiff SDS International, Inc.

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