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Unnecessary Corrective Action Enjoined

The Court of Federal Claims enjoined the government from proceeding with corrective action because the corrective action lacked a rational basis and was contrary to law, and the balance of other factors favored issuing a preliminary injunction. The protester, the initial awardee of a firm-fixed-price contract to construct an aircraft maintenance hangar, sought to enjoin the suspension of its performance and corrective action proposed by the government in response to a Government Accountability Office protest. The request for proposals stated the contract would be awarded without discussions based on a best value determination considering past performance and price. In making the initial award, the government established a "competitive range" that included only the protester. The corrective action expanded the competitive range to include the three offerors with the best combination of price and past performance and permitted the three offerors to submit revised proposals.

Prejudicial Auction

The court found the government had misapplied the concept of competitive range, which, according to FAR 15.306(c)(1), should be established only when discussions are conducted. Conversely, there was no need to establish a competitive range where award was to be made on the basis of initial proposals. The establishment of a competitive range, and its expansion during the corrective action, was irrelevant to the procurement process. There also was no rational basis to put the protester through another round of proposals. None of the government's requirements had changed, and the government still contemplated an award without discussions. The request for revised proposals was particularly prejudicial to the protester because the government had disclosed the protester's price to the other offerors in their debriefing, thereby creating an auction process "for no good reason." The GAO protest was dismissed as academic, but if the government thought the GAO protest had merit, it should have reevaluated the initial proposals. The court concluded the protester suffered irreparable harm because its retention of the contract was in jeopardy, and any harm caused by delay in performance and the potential claim for additional damages resulting from the stop-work order was caused by the government's unnecessary action. Moreover, the public interest in the integrity of the procurement process would not be preserved if the government were permitted to disclose offeror prices, request revised proposals for unchanged work, and base corrective action on an irrelevant and inapplicable competitive range determination. (Sheridan Corp. v. U.S., et al., FedCl, 54 CCF 79,425)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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