Free Published Opinion - District Court of Federal Claims - federal

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In the United States Court of Federal Claims
No. 05-1229C Filed: July 11, 20061 Reissued for Publication: August 23, 2006 * * * * * * * * * * * * * * KSD, INC.,

Plaintiff, v. UNITED STATES, Defendant, and MCDONNELL DOUGLAS HELICOPTER COMPANY, Defendant-Intervenor.

* * * * * * * * * * * * * *

* * * * * * * * * * * * * * * * * * *

Pre-Award Bid Protest; Motion to Dismiss; Interested Party; Sole Source Award; Injunctive Relief.

Howell Roger Riggs, Dick, Riggs, Miller & Stem, LLP, Huntsville, Alabama, for the plaintiff. Andrew P. Averbach, Trial Attorney; Bryant G. Snee, Assistant Director; David M. Cohen, Director, Commercial Litigation Branch; Peter D. Keisler, Assistant Attorney General, Civil Division, United States Department of Justice, Washington, DC, for the defendant. Major Patrick Gary, United States Army Litigation Center, of counsel. Richard B. Clifford, Jr., Perkins Coie LLP, Washington, DC, for the DefendantIntervenor. Lee P. Curtis, Perkins Coie LLP, of counsel.

This opinion was issued under seal on July 11, 2006. The parties were instructed to propose material for redaction. The original opinion is reissued with redactions indicated by the designation "[deleted]."

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OPINION HORN, J. This is a pre-award bid protest case in which the plaintiff, KSD, Inc. (KSD), claims that the United States Army failed to follow required and appropriate proceedings, including the Competition in Contracting Act (CICA), 41 U.S.C. § 253 et seq. (2000), when it awarded a sole source contract to the defendant-intervenor, the McDonnell Douglas Helicopter Company (MDHC), a subsidiary of the Boeing Corporation. The plaintiff filed motions for preliminary and permanent injunction and a motion for judgment upon the administrative record. The plaintiff alleges that the Army "violated CICA's mandate for full and open competition by administratively creating excessively priced sole source acquisitions based on the false justification that the `Fat Boy' is a commercial item that was developed at private expense." The defendant and defendant-intervenor filed motions to dismiss the plaintiff's complaint on the basis that the plaintiff lacks standing to bring its complaint. The defendant and defendant-intervenor also opposed injunctive relief and filed cross-motions for judgment upon the administrative record. After briefing by the parties, at a hearing in court, the court denied the plaintiff's motions for preliminary and permanent injunction and granted the defendant and intervenor's motions for judgment upon the administrative record. This opinion memorializes the decision issued to the parties orally in court. FINDINGS OF FACT This case arises out of a solicitation for main rotor strap assemblies for the AH-64 Apache Helicopter. The main rotor strap assembly retains the main rotor blade to the rotor hub of the helicopter. In 2001, the Army awarded a sole source contract to MDHC for an "improved" main rotor strap assembly, which is commonly refered to by contractors and the government as a "Fat Boy" strap pack. Before the Army began acquiring the "Fat Boy" strap packs from MDHC, the plaintiff, KSD, had provided the Army with an earlier version of the strap pack, known as the "Jenny Craig" strap pack. The 2001 sole source contract to MDHC for "Fat Boy" strap packs expired on December 31, 2005. A new solicitation was issued, a contract awarded, and KSD protests the sole source award of the 2005 "Fat Boy" contract to MDHC. On May 17, 2005, the United States Army Aviation and Missile Command (AMCOM) published a pre-solicitation notice for solicitation No. W58RGZ-04-R-0982 on the Federal Business Opportunities (FedBizOpps) website, http://www.fedbizopps.gov. The May 17, 2005 notice announced a requirement for 135 parts in support of the Army's AH-64 Apache Helicopter. One of the parts listed in the notice was the Main Rotor Strap Assembly, part no. 7-511411146-3, which is the "Fat Boy" strap pack assembly. The Army has designated the "Fat Boy" strap pack assembly a critical safety item "whose failure, malfunction, or absence could cause loss of or serious damage to the aircraft and/or serious injury or death to the occupants." For this reason, the part may be procured only from an "approved source" that has satisfied the Army's engineering and testing requirements. A source from which this item is to be procured must have "demonstrated the technical ability to produce 2

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this item, including possession of the necessary inspection/test equipment and manufacturing technology. Sources must be approved prior to being awarded a contract for this item." The May 17, 2005 notice stated that the Army intended to award MDHC a three-year, indefinite delivery, indefinite quantity (IDIQ) contract for the 135 different parts, including the "Fat Boy" strap pack assembly, on a sole source basis. The plaintiff protested the 2005 sole source award of the "Fat Boy" contract to MDHC. To understand the protest under review, a brief review of the relevant background is helpful. MDHC is the designer and manufacturer of the AH-64 Apache Attack Helicopter. KSD is an aerospace manufacturing company engaged in the production of flight safety parts and assemblies for military and commercial helicopters. In 1994, KSD sought and received Flight Safety Part Source Approval for part no. 7-311411146-7, also known as the "Jenny Craig" strap pack. In a May 27, 1997 letter to the United States Army Aviation and Troop Command (ATCOM), KSD made a preliminary inquiry to the Army to determine if there was "a general need or interest in developing a Main Rotor Strap Assembly which would carry a slightly higher load." In its letter, KSD informed the Army that KSD "has the engineering expertise to increase the load carrying capacity of the Strap Assembly." According to the plaintiff, the Army did not respond to KSD's inquiry. On July 25, 1997, KSD submitted an unsolicited proposal to the Army to develop and qualify an improved strap pack assembly at a cost of $51,235.00 to the government, which would provide increased load carrying capacity for the AH-64 Apache Helicopter. According to the Army's own statements, the Army misplaced KSD's July 25, 1997 proposal and did not respond to it. In 1996, before KSD had submitted its unsolicited proposal to modify the "Jenny Craig" strap pack, Boeing had submitted its own unsolicited proposal to design an improved strap pack for AMCOM. AMCOM conducted an economic evaluation of Boeing's proposal and verbally advised Boeing that government funding was not available for the design of the new strap pack. Boeing, however, was advised that it could pursue an improved strap pack under the Department of Defense's "commercialization initiative," pursuant to which "industry designs, develops and qualifies a new product at their own expense, and then markets it to their customers." In September, 1999, while Boeing's qualification procedure of the "Fat Boy" was underway, KSD requested an opportunity to compete as a prime vendor for the "Fat Boy" strap pack and requested all engineering data required to support the redesign and testing of the current strap pack assembly. AMCOM responded to KSD's request on October 5, 1999, informing KSD that because the government did not pay Boeing for the redesign of the strap packs, the data is considered proprietary to Boeing and, therefore, cannot be provided for KSD's use. In the same letter, the Army offered to assist KSD in redesigning and qualifying a new strap pack. Specifically, the Army stated that "if KSD is interested in redesigning and qualifying a strap pack, the Government will afford you the same assistance given to Boeing during its redesign and qualification. That assistance includes providing aircraft loads data, support in the development of a new strap pack design, and approval of test plans and test results. The cost to redesign and qualify another strap pack 3

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would, however, have to be at KSD's expense." There is no evidence in the record that KSD responded to this offer for assistance. On July 18, 1999, the government issued a Justification and Approval (J&A) for a sole source contract of the improved "Fat Boy" strap packs to MDHC. In the J&A, the Army stated that "MDH[C] is the only responsible source capable of providing the supplies or services necessary for manufacture of Apache Longbow aircraft." In a letter sent to AMCOM on September 10, 1999, KSD expressed its concern over the sole-source contract to Boeing, informing AMCOM of KSD's history with the manufacture and production of helicopter strap packs, including more than 4,000 strap packs that were ordered by the Army from KSD for the AH-64 helicopter. In the letter, KSD also requested that it be provided the same opportunity to compete on the 1999 contract as the prime vendor. In response to KSD's September 10, 1999 letter, and to KSD's concerns about the sole source contract to MDHC, the Army stated that Boeing had performed all of the research and development on the new strap pack with no government funding. Therefore, AMCOM contended: "Since the Government did not pay for the Boeing redesign of the strap pack, the data is considered proprietary to the Boeing Company and therefore cannot be provided for your [KSD's] use." On August 1, 2000, the Army approved Boeing's qualification for its design of the "Fat Boy" strap pack.2 On November 29, 2000, AMCOM Contracting Officer Robert Deppe executed another J&A for other than full and open competition with respect to the procurement of "Fat Boy" strap packs. The November, 2000 J&A concluded that: "The Apache Attack Helicopter Project Manager's Office has found no other contractor that possesses the detailed technical information required to manufacture the strap packs. No viable competitive alternative exists for this requirement as MDHC is the only source possessing the required technical data and corporate knowledge." The following day, AMCOM published a pre-solicitation notice in the Commerce Business Daily (CBD) providing notice of the procurement of 2100 "Fat Boy" strap pack assemblies upon a sole source basis, with an option to purchase additional strap packs as spares. The notice also stated that a sole source award was justified because "the strap pack is a commercial product developed by MDHC and the technical data is proprietary to the manufacturer." KSD filed an agency level protest on December 7, 2000, asserting that the "Fat Boy" strap pack was not a commercial item or product as justified by the Army in its November, 2000 J&A. By letter dated February 14, 2001, the Army denied KSD's protest. The Army
2

In a presentation and letter prepared in response to a congressional inquiry, the Army indicated that the "Fat Boy" strap pack had a forecasted service life that was 3 to 4 times longer than the "Jenny Craig," was forecasted to require 62 percent less maintenance than the "Jenny Craig" and was believed to be generally stronger than the "Jenny Craig." In 2005, the Army further determined that ultrasonic and florescent entrant inspection of the "Fat Boy" need only be conducted after 250 flight hours, rather than 125 hours, as had been the case under the "Jenny Craig." 4

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stated in its denial of KSD's agency protest that: "The use of the term `commercial' as stated in the [Commerce Business Daily] synopsis has been misconstrued and is not used in context of the definition for a commercial item in FAR Part 2.0." The letter continued that the "Fat Boy" had been "solely developed by the McDonnell Douglas Helicopter Company (MDHC) under a contractor funded commercialization program." On March 19, 2001, the AMCOM Small Business Administration (SBA ) Competition Advocate, Wade Griffin, Jr., approved the November, 2000 J&A, but recommended acquisition of "the basic quantity only" (emphasis in original). In addition, Mr. Griffin requested information concerning "potential sources seeking qualification prior to any option exercise." On April 3, 2001, three weeks later, Ralph Massey, an SBA Procurement Center Representative, sent a memorandum to Mr. Griffin which stated that the "Fat Boy" contract would result in the Army "for all practical purposes, be using this sole source buy to repay Boeing/McDonnell [somewhere between $15M and $20M] for their Non-Recurring Engineering costs for both the development and qualification testing of the new strap assembly." (bracketed language in original). A subsequent memorandum from Mr. Massey in the record, dated April 27, 2001, stated that: "This procurement is a perfect example of the fallacy of depending upon the `DoD Commercialization Initiative' program to fund needed redesigns of items on a weapons platform, rather than having a PM include an adequate funding line in the POM." The same memorandum indicated that the initial procurement may have been caused by the Army's failure to plan funding for the redesign of the strap pack. Specifically, Mr. Massey stated: "The current undesirable sole source acquisition situation can be traced directly to the decision in the mid 1990s by the `Strap Team' at St. Louis which did not adequately push the case for NRE [Non-Recurring Engineering] funds to support competition on re-design of an improved MR strap assembly." On July 31, 2001, the Army awarded MDHC a sole-source contract, No. DAAH2301-C-0092, to supply 1,992 "Fat Boy" strap packs to AMCOM, with a government option to purchase an additional 220 strap packs. Also, on the same date, the Army modified a different existing contract, No. DAAH23-00-C-0001, for MDHC to provide 240 "Fat Boy" strap packs. Under each contract, the unit price of the "Fat Boy" strap pack was [deleted]. In the 2001 contract and in a separate modification of an existing contract, the government and MDHC specifically agreed that the technical data rights pertaining to the "Fat Boy" strap pack would not be provided to the government. Specifically, the 2001 contract incorporated the clause at Defense Federal Acquisition Regulations Supplement (DFARS) 252.227-7015 (NOV 1995), "Technical Data - Commercial Item," and stated that the section "[a]pplies to Improved Strap Pack, P/N 7-511411146-1. Technical Data pertaining to Improved Strap Pack is not delivered under this contract. The Government's rights are limited to the rights defined in this clause." Similarly, the contract modification for contract No. DAAH23-00-C-0001 stated: "Both parties agree that DFARS [2]52[.]2277015 is incorporated by reference in Section I and applies to the design and development technical data of the Improved Strap Pack, P/N 7-511411146-1 only. The only data to be delivered under this effort is specified in Section C, Statement of Work, Attachment 01." 5

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The Army's 2001 contract with MDHC, No. DAAH23-01-C-0092, for "Fat Boy" strap packs, expired on December 31, 2005. Before the contract expired, on May 17, 2005, AMCOM completed an acquisition plan identifying a requirement for 135 different spare parts for the AH-64 helicopter, which it proposed to acquire pursuant to a single IDIQ contract with MDHC. Among the parts identified was part number 7-511411146-3, the "Fat Boy" strap pack, which AMCOM had been procuring from MDHC since 2001. AMCOM's acquisition plan for the 2005 contract was approved by the same Competition Advocate, Mr. Griffin, who had approved the November, 2000 J&A for a sole source acquisition, and by AMCOM's small and disadvantaged business utilization office. The defendant states that AMCOM proposed to procure the strap packs through MDHC upon a sole source basis primarily because the straps were assigned an Acquisition Method Reason Code (AMRC) of 3D. Assignment of a 3D code indicated that AMCOM did not possess "complete, accurate or current technical data required to competitively procuring [sic] the parts" and that only MDHC possessed the necessary data. In addition, the "Fat Boy" strap packs were designated as critical safety items, and, therefore, were required to be obtained from an approved source. Also, the Army's "Acquisition Plan for AH-64 System (Apache Spares)," stated that: "Competition for the procurement of the items is not considered economically feasible . . . competition cannot be improved at this time for reasons of lack of data, tooling, knowledge, expertise, and/or qualification testing." The defendant states, and an AMCOM document reveals, that only MDHC and two sub-vendors, Klune Industries, Inc., and System 3, Inc., had been approved as sources of the "Fat Boy" strap pack. Additionally, the government states that in contemplation of the possibility that sources of Apache spare parts other than MDHC and its sub-vendors might secure approval at a later date, AMCOM's acquisition plan specifically provided that, in the event any new sources of critical safety items such as the strap pack were approved, new orders for such items would not be placed under the contemplated IDIQ contract, but, instead, be separately processed and competitively acquired. On May 17, 2005, AMCOM posted its pre-solicitation notice on the FedBizOpps website advertising that it was going to sole-source the "Fat Boy" strap pack contract to MDHC. The notice stated that AMCOM intended "to establish a three (3) year Indefinite Delivery Indefinite Quantity (IDIQ) type contract with two unpriced options to extend the period of performance for an additional three years (each option) applicable to AH-64 Apache Helicopter Spares." AMCOM's presolicitation notice incorporated "Note 22," which is found at http://www.fedbizopps.gov/Numbered_Notes.html, and provides: The proposed contract action is for supplies or services for which the Government intends to solicit and negotiate with only one source under the authority of FAR 6.302. Interested persons may identify their interest and capability to respond to the requirement or submit proposals. This notice of intent is not a request for competitive proposals. However, all proposals received within forty-five days (thirty days if award is issued under an existing basic ordering agreement), after date of publication of this synopsis will be considered by the Government. A determination by the Government not to 6

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compete with this proposed contract based upon responses to this notice is solely within the discretion of the Government. Information received will normally be considered solely for the purpose of determining whether to conduct a competitive procurement. The defendant claims that neither KSD, nor any other party, communicated to AMCOM an interest in and a capability of producing "Fat Boy" strap packs within the 45day window as required by Note 22. The plaintiff, however, claims that it did express an interest in the strap pack contract within the 45-day period. Specifically, KSD claims that its representative, Les McCollum, made weekly visits to the AMCOM Competition Advocate, Wade Griffin, and that some of those meetings occurred during the required 45day period. KSD claims that Mr. McCollum communicated KSD's interest in the procurement of the "Fat Boy" strap pack to the Competition Advocate during those visits. In addition, on September 29, 2005, after AMCOM had denied KSD's agency-level protest, and after KSD had lodged its protest with the GAO, KSD submitted a letter to AMCOM indicating that KSD believed that "because of the minor revisions which are dimensional only our prior qualification to manufacture MRSA P/N: 7-311411146-7 is sufficient. KSD intends to submit a proposal for a product which meets all dimensional and performance criteria." Concurrently with the publication of the pre-solicitation notice, AMCOM prepared the "Justification Review Document for other than Full and Open Competition" to procure the "Fat Boy" strap pack and 134 other Apache spare parts from MDHC upon a sole source basis. This justification was approved on July 25, 2005 by Claude M. Bolton, Jr., the Assistant Secretary of the Army for Acquisition, Logistics and Technology. On May 26, 2005, a separate document requesting approval of the justification regarding the "Fat Boy" strap pack was also signed by the Head of the Contracting Activity. In addition, a separate justification was prepared solely for the "Fat Boy" strap pack and was independently approved by Wade Griffin, Jr., AMCOM's Small Business Competition Advocate. The government suggests that this separate justification reflects AMCOM's specific conclusion that the Army lacked the technical data necessary to conduct a competitive procurement for the "Fat Boy" strap pack. The government further states that although the Competition Advocate had conducted market research by publishing the item in its March, 2005 "Shopping List," no new potential sources had either expressed interest in producing the "Fat Boy," or otherwise been identified. Following approval of the 135-item J&A by the Assistant Secretary of the Army, AMCOM issued solicitation W58RGZ-04-R-0982 to MDHC. KSD submitted an agency level protest to AMCOM on August 15, 2005. KSD based its agency protest on two claims. First, KSD argued that the "Fat Boy" strap pack was a modification of an existing part, which was owned by the government, and that the modification was based on a "Commercialization Initiative," but that the new part does not meet the definition of a "Commercial Item" under FAR 2.101 (2005). Second, KSD argued that the solicitation for the "Fat Boy" strap pack did not "conform with the spirit, intent, or requirements of the Competition in Contracting Act of 1984." KSD stated that the Army's 7

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action "has resulted in all competition being eliminated for this item in the future." Among the relief requested, KSD requested in its agency protest that the Army provide KSD with technical data so that it could submit a Source Approval Package. The Army responded to and denied KSD's agency protest on September 15, 2005. In its response, the Army stated that because Boeing developed the "Fat Boy" at private expense, "the technical data package is proprietary data not owned by the Government, and therefore unavailable for distribution by the Army." The Army further stated that: "The Main Rotor Strap Assembly is not a commercial item as defined by the Federal Acquisition Regulations. (FAR) Subpart 2.101." In another AMCOM internal memorandum, the Army indicated that "the strap pack does not qualify as a commercial item under the Federal Acquisition Regulation (FAR) 2.101(b), definition of a commercial item. The AH-64 Attack Helicopter is dedicated to a military function with no civilian counterpart." Similarly, in the July 25, 2005 J&A, for the "Fat Boy" strap pack, the Army further stated that "none of these items are identified as commercial items."3 KSD initially protested to the General Accounting Office (GAO), which dismissed KSD's protest on October 31, 2005. The GAO found that KSD was "not an interested party within the meaning of [GAO's] Bid Protest Regulations, 4 C.F.R. § 21.0(a) (2005)." In its opinion, the GAO stated: "We have consistently held that, where an agency issues a presolicitation notice advising that it intends to conduct a sole-source acquisition, a prospective offeror is required, as a perquisite [sic] to filing a protest in our Office, to have submitted a timely expression of interest in response to the FedBizOp[p]s notice. . . . It follows that where, as here, a firm does not submit a timely expression of interest in response to the Presolicitation notice, it is ineligible to compete for the requirement." Thus, the GAO dismissed KSD's protest because it found that it did not respond to AMCOM's presolicitation notice posted on the FedBizOpps website on May 17, 2005. KSD filed its bid protest complaint and motions for preliminary and permanent injunction in this court on November 22, 2005. DISCUSSION 1. Defendant's and Intervenor's Motions to Dismiss The defendant and intervenor filed motions to dismiss pursuant to RCFC 12(b)(1). Subject matter jurisdiction may be challenged at any time by the parties, by the court sua sponte, and even on appeal. See Fanning, Phillips, Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998) (quoting Booth v. United States, 990 F.2d 617, 620 (Fed. Cir.), reh'g
3

Indicating how the product was developed, but not addressing the issue of proprietary rights, a Boeing document in the record, titled "Qualification of New Design Main Rotor Strap Pack," states that: "A Commercialization Approach agreed upon by the US Army Aviation and Missile Command (AMCOM) Huntsville, Alabama and Boeing was used to develop the design." 8

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denied (1993)); United States v. Newport News Shipbuilding and Dry Dock Co., 933 F.2d 996, 998 n.1 (Fed. Cir. 1991). "In fact, a court has a duty to inquire into its jurisdiction to hear and decide a case." Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 1342 (Fed. Cir. 2001) (citing Johannsen v. Pay Less Drug Stores N.W., Inc., 918 F.2d 160, 161 (Fed. Cir. 1990); View Eng'g, Inc. v. Robotic Vision Sys., Inc., 115 F.3d 962, 963 (Fed. Cir. 1997) ("[C]ourts must always look to their jurisdiction, whether the parties raise the issue or not."). A plaintiff must establish jurisdiction by a preponderance of the evidence. See Reynolds v. Army and Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988); Thomas v. United States, 56 Fed. Cl. 112, 115 (2003); Martinez v. United States, 48 Fed. Cl. 851, 857 (2001), aff'd in part, 281 F.3d 1376 (Fed. Cir.), reh'g denied (2002); Bowen v. United States, 49 Fed. Cl. 673, 675 (2001), aff'd, 292 F.3d 1383 (Fed. Cir. 2002); Vanalco, Inc. v. United States, 48 Fed. Cl. 68, 73 (2000); Alaska v. United States, 32 Fed. Cl. 689, 695 (1995), appeal dismissed, 86 F.3d 1178 (Fed. Cir. 1996) (table). When construing the pleadings pursuant to a motion to dismiss, the court should grant the motion only if "it appears beyond doubt that [the plaintiff] can prove no set of facts in support of [the] claim which would entitle [the plaintiff] to relief." Davis v. Monroe County Bd. of Educ., 526 U.S. 629, 654 (1999) (quoting Conley v. Gibson, 355 U.S. 41, 46 (1957)); Brubaker Amusement Co. v. United States, 304 F.3d 1349, 1355 (Fed. Cir. 2002), cert. denied sub nom. Penn Triple S v. United States, 538 U.S. 921 (2003); Leider v. United States, 301 F.3d 1290, 1295 (Fed. Cir.), reh'g and reh'g en banc denied (2002), cert. denied, 538 U.S. 978 (2003); Conti v. United States, 291 F.3d 1334, 1338 (Fed. Cir.), reh'g en banc denied (2002), cert. denied, 537 U.S. 1112 (2003); Consol. Edison Co. v. O'Leary, 117 F.3d 538, 542 (Fed. Cir. 1997), cert. denied sub nom. Consol. Edison Co. v. Pena, 522 U.S. 1108 (1998); see also New Valley Corp. v. United States, 119 F.3d 1576, 1579 (Fed. Cir.), reh'g denied, and reh'g en banc declined (1997); Highland Falls-Fort Montgomery Cent. School Dist. v. United States, 48 F.3d 1166, 1169 (Fed. Cir.), cert. denied, 516 U.S. 820 (1995); Hamlet v. United States, 873 F.2d 1414, 1416 (Fed. Cir. 1989); W.R. Cooper Gen. Contractor, Inc. v. United States, 843 F.2d 1362, 1364 (Fed. Cir. 1988) ("When the facts alleged in the complaint reveal `any possible basis on which the non-movant might prevail, the motion must be denied.'"); RCS Enters., Inc. v. United States, 46 Fed. Cl. 509, 513 (2000). Pursuant to RCFC 8(a)(1) and Rule 8(a)(1) of the Federal Rules of Civil Procedure, a plaintiff need only state in the complaint "a short and plain statement of the grounds upon which the court's jurisdiction depends." RCFC 8(a)(1). However, "[d]etermination of jurisdiction starts with the complaint, which must be well-pleaded in that it must state the necessary elements of the plaintiff's claim, independent of any defense that may be interposed." Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir.), reh'g denied (1997) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1 (1983)). Nevertheless, "conclusory allegations unsupported by any factual assertions will not withstand a motion to dismiss." Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir. 1981), aff'd, 460 U.S. 325 (1983); Bradley v. Chiron Corp., 136 F.3d 1317, 1322 (Fed. Cir. 1998) ("Conclusory allegations of law and unwarranted inferences of fact do not suffice to support a claim.").

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When deciding a motion to dismiss based on a lack of subject matter jurisdiction, this court must assume that all undisputed facts alleged in the complaint are true and must draw all reasonable inferences in the non-movant's favor. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Conley v. Gibson, 355 U.S. at 45-46; Boise Cascade Corp. v. United States, 296 F.3d 1339, 1343 (Fed. Cir. 2002), cert. denied, 538 U.S. 906 (2003); Pixton v. B & B Plastics, Inc., 291 F.3d 1324, 1326 (Fed. Cir. 2002); Commonwealth Edison Co. v. United States, 271 F.3d 1327, 1338 (Fed. Cir. 2001) (quoting New Valley Corp. v. United States, 119 F.3d at 1580), cert. denied, 535 U.S. 1096 (2002); Boyle v. United States, 200 F.3d 1369, 1372 (Fed. Cir. 2000); Perez v. United States, 156 F.3d 1366, 1370 (Fed. Cir. 1998); Highland Falls-Fort Montgomery Cent. School Dist. v. United States, 48 F.3d at 1167 (citing Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991)); Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995); Hamlet v. United States, 873 F.2d at 1416; Ho v. United States, 49 Fed. Cl. 96, 100 (2001), aff'd, 30 Fed. Appx. 964 (Fed. Cir. 2002); Alaska v. United States, 32 Fed. Cl. at 695. If a defendant or the court challenges jurisdiction or plaintiff's claim for relief, however, the plaintiff cannot rely merely on allegations in the complaint, but must instead bring forth relevant, competent proof to establish jurisdiction. McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936); see also Land v. Dollar, 330 U.S. 731, 735 n.4 (1947); Reynolds v. Army and Air Force Exch. Serv., 846 F.2d at 747; Catellus Dev. Corp. v. United States, 31 Fed. Cl. 399, 404-05 (1994). In order for this court to have jurisdiction over a plaintiff's complaint, the Tucker Act requires that the plaintiff identify an independent substantive right enforceable against the United States for money damages. See 28 U.S.C. § 1491 (2000). The Tucker Act states: The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort. 28 U.S.C. § 1491(a)(1). As interpreted by the United States Supreme Court, this Act waives sovereign immunity to allow jurisdiction over claims (1) founded on an express or implied contract with the United States, (2) seeking a refund from a prior payment made to the government or (3) based on federal constitutional, statutory, or regulatory law mandating compensation by the federal government for damages sustained. See United States v. Testan, 424 U.S. 392, 400, reh'g denied, 425 U.S. 957 (1976) (citing Eastport Steamship Corp. v. United States, 178 Ct. Cl. 599, 605-06, 372 F.2d 1002, 1009 (1967)); see also Palmer v. United States, 168 F.3d 1310, 1314 (Fed. Cir. 1999); Stinson, Lyons & Bustamante, P.A. v. United States, 33 Fed. Cl. 474, 478 (1995), aff'd, 79 F.3d 136 (Fed. Cir. 1996). A waiver of traditional sovereign immunity cannot be implied but must be "unequivocally expressed." INS v. St. Cyr, 533 U.S. 289, 299 n.10 (2001); United States v. Nordic Village, Inc., 503 U.S. 30, 33 (1992); Ins. Co. of the West v. United States, 243 F.3d 1367, 1372 (Fed. Cir.), reh'g and reh'g en banc denied (2001); Saraco v. United 10

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States, 61 F.3d 863, 864 (Fed. Cir. 1995) (quoting United States v. King, 395 U.S. 1, 4 (1969)), cert. denied, 517 U.S. 1166 (1996). The Tucker Act, however, merely confers jurisdiction on the United States Court of Federal Claims; "`it does not create any substantive right enforceable against the United States for money damages.'" United States v. Mitchell, 445 U.S. 535, 538 (quoting United States v. Testan, 424 U.S. at 398-99), reh'g denied, 446 U.S. 992 (1980); White Mountain Apache Tribe v. United States, 249 F.3d 1364, 1372 (Fed. Cir. 2001), aff'd, 537 U.S. 465 (2003); Cyprus Amax Coal Co. v. United States, 205 F.3d 1369, 1373 (Fed. Cir. 2000), cert. denied, 532 U.S. 1065 (2001); New York Life Ins. Co. v. United States, 118 F.3d 1553, 1555-56 (Fed. Cir. 1997), cert. denied, 523 U.S. 1094 (1998); United States v. Connolly, 716 F.2d 882, 885 (Fed. Cir. 1983) (en banc), cert. denied, 465 U.S. 1065 (1984). Individual claimants, therefore, must look beyond the jurisdictional statute for a waiver of sovereign immunity. United States v. Mitchell, 445 U.S. at 538. In order for a claim to be successful, the plaintiff "must also demonstrate that the source of law relied upon `can fairly be interpreted as mandating compensation by the federal government for the damages sustained.'" White Mountain Apache Tribe v. United States, 249 F.3d at 1372 (quoting United States v. Mitchell, 463 U.S. 206, 216-17 (1983)); United States v. Testan, 424 U.S. at 400; Tippett v. United States, 185 F.3d 1250, 1254 (Fed. Cir. 1999) ("[T]he plaintiff must assert a claim under a separate money-mandating constitutional provision, statute, or regulation, the violation of which supports a claim for damages against the United States.") (quoting James v. Caldera, 159 F.3d 573, 580 (Fed. Cir. 1998), reh'g denied (1999)); Doe v. United States, 100 F.3d 1576, 1579 (Fed. Cir. 1996), reh'g and reh'g en banc denied (1997); Eastport Steamship Corp. v. United States, 178 Ct. Cl. at 607, 372 F.2d at 1009. The defendant and intervenor have filed their motions to dismiss arguing that KSD is not an interested party and, therefore, lacks standing to brings its case. According to a decision by the United States Court of Appeals for the Federal Circuit, "[s]tanding to sue is a threshold requirement in every federal action." Sicom Sys., Ltd. v. Agilent Tech., 427 F.3d 971, 975 (Fed. Cir. 2005); see also Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.), reh'g and reh'g en banc denied (2003) ("[B]ecause the question of prejudice goes directly to the question of standing, the prejudice issue must be reached before addressing the merits."). The party invoking federal jurisdiction bears the burden of establishing standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); Myers Investigative & Sec. Servs., Inc., v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002); see also Rothe Dev. Corp. v. Dep't of Def., 413 F.3d 1327, 1334 (Fed. Cir. 2005). The Tucker Act provides that 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 a proposed procurement." 28 U.S.C. § 1491 (b)(1) (2000). See Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319. Although section 1491(b)(1) does not define the term 11

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"interested party", the United States Court of Appeals for the Federal Circuit has adopted the definition set forth in the Competition in Contracting Act, 31 U.S.C. § 3551(2)(A). See Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d at 1370. In Myers, the Federal Circuit set forth the applicable defitiniton of an "interested party": In bid protests under the Tucker Act, "we . . . construe the term `interested party' in section 1491(b)(1) in accordance with the [standing requirements of the] CICA and hold that standing under § 1491(b)(1) is limited to actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract." Am. Fed'n [of Gov't Employees v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001)]. Thus, the substantial chance rule continues to apply. Myers Investigative & Security Services, Inc. v. United States, 275 F.3d at 1370 (omission in original); see also Banknote Corp. of America, Inc. v. United States, 365 F.3d 1345, 1351-52 (Fed. Cir. 2004) ("Under the Competition in Contracting Act (CICA), which governs the bid protest jurisdiction of the General Accounting Office (GAO), a protest may be filed by an "interested party." 31 U.S.C. § 3551(1). The CICA explicitly defines the term as `an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.' 31 U.S.C. § 3551(2)."). Therefore, in order to establish standing, a plaintiff must show that it is an "`actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract,'" Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319 (quoting Am. Fed'n of Gov't Employees v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001), cert. denied, 534 U.S. 1113 (2002)); but see also CW Government Travel, Inc. v. United States, 61 Fed. Cl. 559, 570 (2004) ("Where a claim is made that the Government violated CICA by refusing to engage in a competitive procurement, it is sufficient for standing purposes if the plaintiff shows that it would have competed for the contract had the Government publicly invited bids or requested proposals."), aff'd, No. 05-0501, 2005 WL 3292539 (Fed. Cir. Dec. 6, 2005). For its "direct economic interest" to be affected, the protestor must show that it was prejudiced by the award. See Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319; Myers Investigative & Security Services, Inc. v. United States, 275 F.3d at 1370 ("[P]rejudice (or injury) is a necessary element of standing"); Hunt Bldg. Co. v. United States, 61 Fed. Cl. 243, 270 (2004), opinion modified on other grounds, 63 Fed. Cl. 141 (2004). To establish prejudice, a protestor must demonstrate that it had a "substantial chance" to have received the award, had it not been for the agency errors in the procurement. Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1331 (Fed. Cir. 2004) (quoting Statistica, Inc. v. Christopher, 102 F.3d 1577, 1582 (Fed. Cir. 1996)); Info. Tech. & Applications Corps. v. United States, 316 F.3d at 1319; Hunt Bldg. Co. v. United States, 61 Fed. Cl. at 270 (finding that protestor was one of two offerors in the competitive range, with both deemed by the agency to be outstanding, and that, therefore, had there been level playing field, the protestor would have had a substantial chance of winning the procurement).

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The challenge for trial courts in bid protest, injunctive relief cases is determining when the trial court has sufficient information to determine with any degree of certainty whether a protester has been prejudiced, that is, whether there was a substantial chance that the protestor would have received the award, but for agency errors in the procurement process. The court's early review of a request for a temporary restraining order or preliminary injunctive relief often occurs before the administrative record has been presented to the trial court. Almost immediately after the complaint is filed, trial courts must make an initial standing determination, including a prejudice determination, based on the allegations in the complaint taken as true, and the exhibits attached thereto. Thus, trial courts often must engage in a two-step process to determine standing, although the United States Court of Appeals for the Federal Circuit has stated that standing to sue is "a threshold requirement in every federal action." Sicom Sys. Ltd. v. Agilent Tech, 427 F.3d at 975; see also Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319 ("[T]he prejudice issue must be reached before addressing the merits.") The first trial court review of standing, shortly after the complaint is filed, results in a preliminary decision by the trial court as to whether the case should proceed and the administrative record should be compiled, or whether under no circumstances can the plaintiff pass the test for standing, including demonstrating prejudice. After presentation of the administrative record to the court, briefing by the parties and oral presentations, if appropriate, the issue of prejudice as well as entitlement to relief is more fully reviewable. Further exploration by the court may be warranted prior to concluding whether prejudice has occurred and whether the plaintiff is entitled to relief. Thus, a case may have to proceed through full review of a request for permanent injunctive relief before the trial court can relate back to the jurisdictional issue of standing and accurately determine whether a protestor has been prejudiced and whether the protestor does or does not have standing. In this case, the defendant and intervenor make two arguments as to why the plaintiff is not an interested party. First, they argue that KSD is not an interested party because it was not an approved source for the procurement of the "Fat Boy" strap pack. Second, the defendant and intervenor argue that even if KSD were an approved source, KSD still lacks standing because it did not respond to the Army's pre-solicitation notice within 45 days, and did not inform the Army that KSD was an interested bidder. In order to have standing to protest a sole-source award, a bidder "must show that it would have been a qualified bidder." Meyers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d at 1370-71. To support its argument that KSD lacks standing because it was not an approved source or qualified bidder, the defendant cites to Space Exploration Technologies Corp v. United States, 68 Fed. Cl. 1 (2005). In Space Exploration, a plaintiff protested the sole source award of a United States Air Force contract for expendable launch vehicles. In Space Exploration, similar to this case, the defendant filed a motion to dismiss arguing that the plaintiff lacked standing. In that case, however, the defendant and intervenor argued that the plaintiff lacked standing because it did not submit a bid for the contract. Id. at 4. The court found significant in Space Exploration, unlike the case at bar, that the plaintiff conceded that it was unable to perform the work being solicited by the 13

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Air Force. Id. at 5 ("Most significantly, plaintiff admits that it will not have full EELV launch capability prior to FY07."). In the case currently before the court, KSD argues that it could have manufactured the "Fat Boy" strap, but that the government improperly withheld the technical information KSD needed in order to produce the "Fat Boy" strap pack. The plaintiff argues that the Army inappropriately informed KSD that the "Fat Boy" strap pack was developed by Boeing at Boeing's expense and that, therefore, the technical information regarding the "Fat Boy" strap pack was proprietary to Boeing and could not be provided to KSD. In short, KSD argues that it was the Army's actions that prevented KSD from becoming an approved "Fat Boy" strap pack manufacturer. The plaintiff states: "The Defendant's argument is predicated upon the very actions that KSD complains violated applicable statutes and regulations." The plaintiff relies on Cubic Defense Systems, Inc. v. United States, 45 Fed. Cl. 239, 247, appeal dismissed, 230 F.3d 1375 (Fed. Cir. 1999), a case which the government also uses in an attempt to support its own argument. In Cubic, the court stated that: Cubic's claim points to the Government's actions as the cause of its inability to compete and as the root cause of the alleged CICA violation. Therefore, to accept the Government's arguments potentially would allow the Government, through its own actions, to exclude a party from a procurement, thereby hindering competition, and then rely upon those actions to contend that the excluded party was not a prospective offeror and thus not an interested party. See ATA Defense Indus., 38 Fed. Cl. at 495. To do so would subvert the aims of CICA, constrict this court's jurisdiction in contrast with Congress' recent expansion of it, and enable the Government to assert standing to immunize its planned sole-source procurements from CICA-based challenges. Cubic Def. Sys., Inc. v. United States, 45 Fed. Cl. at 247; see also ABF Freight Sys., Inc. v. United States, 55 Fed. Cl. 392, 399 (2003) (finding that a plaintiff that did not submit a bid had standing because the plaintiff was "discouraged" by alleged improprieties from submitting a bid during the agency's solicitation process); Cybertech Group Inc. v. United States, 48 Fed. Cl. 638, 644 (2001) (finding that a plaintiff had standing because the agency's failure to provide plaintiff with a Request for Quotations was the reason for the plaintiff failing to submit a bid); ATA Def. Indus., Inc. v. United States, 38 Fed. Cl. at 495 ("But if these procedures did violate controlling statutes and regulations, then the procedures cannot properly serve as a rationale for excluding plaintiff from coming within the scope of Section 1491(b)"). Therefore, when the government's actions wrongfully prevent a bidder from qualifying for or bidding on a solicitation, the government cannot use the contractor's failure to qualify or bid on the solicitation as grounds for finding a lack of standing.

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In considering defendant's and intervener's motions to dismiss, the court must accept as true all of plaintiffs' well-pleaded facts alleged in the complaint and draw all reasonable inferences in the plaintiff's favor. See Godwin v. United States, 338 F.3d 1374, 1377 (Fed. Cir. 2003); Boyle v. United States, 200 F.3d 1369, 1372 (Fed. Cir. 2000); Perez v. United States, 156 F.3d 1366, 1370 (Fed. Cir. 1998); see also Hammitt v. United States, 69 Fed. Cl. 165 (2005); Patton v. United States, 64 Fed. Cl. 768, 773 (2005). If the facts reveal a basis upon which the non-movant might prevail, the motion will be denied. See W.R. Cooper Gen. Contractor, Inc. v. United States, 843 F.2d at 1364. Although KSD admits that it was not an approved source for the "Fat Boy" strap pack, it argues that it could not obtain approval because the government erroneously withheld the technical data pertaining to the "Fat Boy" strap pack. Moreover, KSD asserts in its complaint that the government had reimbursed Boeing for development of the "Fat Boy" strap pack and that, therefore, the strap pack was not a commercial item as alleged by the Army. Based upon the plaintiff's complaint at the early stage of this case, the court could not determine whether Boeing had developed the "Fat Boy" strap pack on its own or whether the government had paid for or obtained any data rights to the "Fat Boy" strap pack. Accepting the plaintiff's uncontroverted allegations in its complaint as true, the court denied the defendant's and intervenor's early motions to dismiss. In addition to arguing that KSD was not an "interested party" because it was not approved by the Army to supply the "Fat Boy" strap pack, the defendant and intervenor also argue that because KSD did not respond to the pre-solicitation notice within 45 days, KSD lacks standing to protest the sole-source award. The CICA requires agencies to achieve full and open competition through the use of competitive procedures. See 10 U.S.C. § 2304 (2000). CICA, however, permits seven exceptions to the full and open requirement under appropriate circumstances. See 10 U.S.C. § 2304(c)(1)-(7). One exception to the requirement for full and open competition exists when the product or service is available from only one responsible source. See 10 U.S.C. § 2304(c)(1). When the government intends to award a sole source contract on the basis that the identified source is the only responsible source available, it is required, under CICA, to publish notice with respect to such contract. See 10 U.S.C. § 2304(f)(1)(C).4 Under FAR 5.207(e) (2005), when applicable, this notice must include any relevant numbered notes, including Note 22, quoted in full above. Note 22 notifies interested parties that they should inform the responsible agency of their interest and capability to perform the anticipated contract work or submit proposals within forty-five calendar days of the publication of the presolicitation notice. See FN Mfg., Inc. v. United States, 41 Fed. Cl. 186, 188 n.3 (1998) ("The Federal Procurement Regulations dictate the inclusion of Note 22 in all proposed contract actions intended for
4

Notices of proposed contract actions must be made available pursuant to the Small Business Act, 15 U.S.C. § 637(e) (2000) and the Office of Federal Procurement Policy Act, 41 U.S.C. § 416 (2000). 15

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award on a sole-source basis."); Standard Mfg. Co., Inc. v. United States, 7 Cl. Ct. 54, 56 (1984) ("Department of Defense FAR Supplement § 5.207, `Preparation and Transmittal of Synopses,' as in force throughout the period here relevant, required that a reference to Note 22 be included in any synopsis for a sole source contract (and defined its contents)."). To support its claim that bidders must respond to the pre-solicitation notice in a timely manner in order to have standing to protest the award, the defendant and intervenor cite to Cubic Defense Systems, Inc. v. United States, 45 Fed. Cl. at 249. In Cubic, the court stated that to have standing as an interested party under Note 22, a contractor must take "affirmative, responsive action," in response to a Note 22 pre-solicitation notice. Id. In Cubic, the plaintiff had made several telephone calls to the contracting agency inquiring about the procurement and showing its interest in bidding on the proposal. The Cubic court found that based upon those telephone calls, the bidder had adhered to the requirements of Note 22, even though it had not actually submitted a formal proposal or anything in writing indicating its interest and ability to perform the contract. Id. at 252. The court stated that "Although Cubic's actions and response to the Commerce Business Daily (CBD) notice do not rise to the level that one ideally would like to see from a party contesting a planned sole-source procurement, these actions are sufficient to allow Cubic to survive a motion to dismiss." Id. To further support its argument that KSD was required to respond to the presolicitation notice within 45 days in order to have standing as an interested party, the intervenor cites to the GAO opinion in Simula Government Products, Inc., B-274,730; 96-2 CPD ¶ 219, 1996 WL 705191 (Comp. Gen. Dec. 9, 1996). In Simula, the GAO found that responding to the Note 22 pre-solicitation notice within 45 days was a strict requirement to have standing to protest a sole source solicitation and stated: In this regard, where a complex requirement is involved, a mere expression of interest in the procurement does not meet the requirements of note 22­an adequate response must at least detail the offeror's ability to meet the requirement; what is actually contemplated is a preliminary proposal which could lead the agency to reconsider the sole-source decision. Simula Gov't Prods., Inc., B-274,730; 96-2 CPD ¶ 219, at 2. (citing Litton Computer Servs., B-256225.4; B-256225.5, 94-2 CPD ¶ 36, 1994 WL 389122 (Comp. Gen. July 21, 1994). In Simula, the GAO found insufficient a submission of only an "undocumented, unexplained, assertion that it could meet the requirement." Id. Without more, the agency was unable to assess whether or not there was only one source capable of meeting the requirement. See id. Although this court agrees that a potential offeror's expression of interest should be more than a fleeting or passing mention that it is interested in the procurement and capable of producing the requirement, a judge of this court in Cubic did not establish as strict a standard as that suggested by the GAO. In Cubic, while recognizing the GAO requirement for a party to indicate its interest and capability to perform, the court found a telephone call 16

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made to the contracting agency in which a contractor expressed its interest in a procurement to be sufficient to show a contractor's interest in the procurement. See Cubic Def. Sys., Inc. v. United States, 45 Fed. Cl. at 250. The Cubic court also found that requiring the plaintiff to have indicated in detail its capability to the agency during the fortyfive day period required by Note 22 "would not be constructive" because the plaintiff's complaint in Cubic stated that the government's actions rendered the plaintiff incapable of competing for the contract. Id. Finally, the Cubic court refused to set forth a strict forty-five day proposal submission deadline as a prerequisite to challenging a sole-source procurement. See Cubic Def. Sys., Inc. v. United States, 45 Fed. Cl. at 252 ("The court is not categorically opposed to enforcing a forty-five day proposal submission deadline as a prerequisite to challenging a planned sole-source procurement in this court, however the facts in this case counsel against adopting such a standard rule at this time."). Therefore, contrary to the defendant's and intervenor's arguments that a contractor must show its interest and capability to perform the contract, in the Court of Federal Claims, it was found sufficient by a judge of this court in Cubic, for a contractor not to demonstrate both "interest" and "capability" to perform in response to a solicitation, but simply to inform the contracting agency that it is interested in and could qualify for the solicitation when the claim upon which the plaintiff rests is founded in the government's own alleged wrongful acts. The same argument as raised in Cubic is raised by KSD in this case, that the government's actions in withholding technical data made KSD incapable of competing for the contract. KSD claims in its reply to defendant's motion to dismiss that it did indicate interest within 45 days as required by Note 22, although it did not submit a formal proposal during that time. Specifically, KSD argues that its representative, Les McCollum, made weekly visits to the Army's Competition Advocate, Wade Griffin, some of which occurred during the 45-day period. The plaintiff claims that during those visits, Mr. McCollum communicated KSD's interest in the procurement of the "Fat Boy" strap pack to the government. The plaintiff, therefore, argues that its actions were consistent with the requirements set forth in Cubic. In addition to arguing that it informed the defendant during the 45-day period that it was interested in competing for the "Fat Boy" solicitation, plaintiff argues that the "Fat Boy" strap pack is simply a modification of strap packs KSD had previously made for the Army and that KSD had informed the Army numerous times that KSD had the capability to improve the strength and load capacity of its strap packs. In support, KSD cites to letters it sent to the Army, including an unsolicited proposal, which informed the Army that KSD had the potential to manufacture a strap pack with improved load capacity. Although the plaintiff provides the court with unconfirmed facts that it contacted the Army during the 45-day period, those facts were not contested by the government and using the Cubic standard, are sufficient to show that the plaintiff has standing. Given the minimal facts before the court early in the case, the court was unable to determine that the plaintiff was without standing and, therefore, denied, the defendant's and intervenor's motions to dismiss. 2. Standard of Review for Bid Protest Cases 17

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The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320, §§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996), amended the Tucker Act and provided the United States Court of Federal Claims with post-award bid protest jurisdiction for actions filed on or after December 31, 1996. See 28 U.S.C. § 1491(b)(1)-(4) (2000). The statute provides that post-award protests of agency procurement decisions are to be reviewed under Administrative Procedure Act (APA) standards, making applicable the standards outlined in Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970) and the line of cases following that decision. See, e.g., Galen Medical Assocs., Inc. v. United States 369 F.3d 1324, 1329 (Fed. Cir.) (citing Scanwell for its reasoning that "suits challenging the award process are in the public interest and disappointed bidders are the parties with an incentive to enforce the law."), reh'g denied (2004); Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) ("Under the APA standard as applied in the Scanwell line of cases, and now in ADRA cases, `a bid award may be set aside if either (1) the procurement official's decision lacked a rational basis; or (2) the procurement procedure involved a violation of regulation or procedure.'"); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). Agency procurement actions should be set aside when they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," or "without observance of procedure required by law." 5 U.S.C. § 706(2)(A), (2)(D) (2000)5; see also
5

The full language of section 706 of the APA provides:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall-(1) compel agency action unlawfully withheld or unreasonably delayed; and (2) hold unlawful and set aside agency action, findings, and conclusions found to be-(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (D) without observance of procedure required by law; (E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of 18

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Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005) ("[T]he inquiry is whether the [government's] procurement decision was `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'") (quoting 5 U.S.C. § 706(2)(A) (2000))). In discussing the appropriate standard of review for bid protest cases, the United States Court of Appeals for the Federal Circuit has discussed specifically subsections (2)(A) and (2)(D) of 5 U.S.C. § 706. See Impresa Contruzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332 n.5; see also NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004) ("Bid protest actions are subject to the standard of review established under section 706 of title 5 of the Administrative Procedure Act (`APA'), 28 U.S.C. § 1491(b)(4) (2000), by which an agency's decision is to be set aside only if it is `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,' 5 U.S.C. § 706(2)(A) (2000).") (citations omitted); Banknote Corp. of Am., Inc. v. United States, 365 F.3d at 1350 ("Among the various APA standards of review in section 706, the proper standard to be applied in bid protest cases is provided by 5 U.S.C. § 706(2)(A): a reviewing court shall set aside the agency action if it is `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'" (citing Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.))), reh'g denied (2000); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319 ("Consequently, our inquiry is whether the Air Force's procurement decision was `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' 5 U.S.C. § 706(2)(A) (2000)."); Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1085 (Fed. Cir. 2001) ("The APA provides that a reviewing court must set aside agency actions that are `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' 5 U.S.C. § 706(2)(A) (Supp. V 1999)."), reh'g and reh'g en banc denied (2001); RAMCOR Servs. Group, Inc. v. United States, 185 F.3d 1286, 1290 (Fed. Cir. 1999). In Impresa Construzioni Geom. Domenico Garufi v. United States, the court wrote: Under the APA standards that are applied in the Scanwell line of cases, a bid award may be set aside if either: (1) [T]he procurement official's decision lacked a rational basis; or (2) the procurement procedure involved a violation of regulation or procedure. . . . When a challenge is brought on the first ground, the courts have recognized that contracting officers are "entitled to exercise discretion upon a broad range of issues confronting them" in the procurement process. Latecoere Int'l, Inc. v. United States Dep't of Navy, 19 F.3d 1342, 1356 (11th Cir. 1994). Accordingly, the test for reviewing courts is to determine whether "the contracting agency provided a coherent and reasonable explanation of its exercise of discretion," id., and the "disappointed bidder bears a `heavy burden' of showing that the award decision `had no rational basis.'" Saratoga Dev. Corp. v. United States, 21 F.3d 445, 456 (D.C. Cir. 1994). When a challenge is brought on the second ground, the

the rule of prejudicial error. 5 U.S.C. § 706. 19

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disappointed bidder must show "a clear and prejudicial violation of applicable statutes or regulations." Kentron [Hawaii, Ltd. v. Warner,] 480 F.2d [1166,] 1169 [(D.C. Cir. 1973)]; Latecoere, 19 F.3d at 1356. Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33 (selected citations omitted); see also Banknote Corp. of Am. v. United States, 365 F.3d at 1351; OMV Med., Inc. v. United States, 219 F.3d 1337, 1343 (Fed. Cir. 2000). A disappointed bidder has the burden of demonstrating the arbitrary and capricious nature of the agency decision by a preponderance of the evidence. See Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995-96 (Fed. Cir. 1996); Labat-Andersen Inc. v. United States, 50 Fed. Cl. 99, 106 (2001); Emery Worldwide Airlines, Inc. v. United States, 49 Fed. Cl. 211, 222, aff'd, 264 F.3d 1071 (Fed. Cir. 2001); Dynacs Eng'g Co. v. United States, 48 Fed. Cl. 614, 619 (2001); Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl. 388, 392 (1999), appeal dismissed, 6 Fed. Appx. 867 (Fed. Cir. 2001). The United States Supreme Court has identified sample grounds which can constitute arbitrary or capricious agency action: The agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs. Ass'n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); but see In re Sang-Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002) ("The agency must present a full and reasoned explanation of its decision . . . . The reviewing court is thus enabled to perform a meaningful review . . . . "). Under an arbitrary or capricious standard, the reviewing court should not substitute its judgment for that of the agency, but should review the basis for the agency decision to determine if it was legally permissible, re