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"Unnecessary" Corrective Action Permanently Enjoined

The government's proposed corrective action was permanently enjoined by the Court of Federal Claims because the corrective action lacked a rational basis and permanent injunctive relief was appropriate. The government awarded the protester a contract for the construction of an aircraft hangar based on the initial proposals and without discussions. When a protest of the award was filed at the Government Accountability Office, the government announced it would take corrective action by enlarging the competitive range and soliciting revised proposals. In a prior decision (54 CCF 79,425), the court found the protester satisfied the four factors required for a preliminary injunction. The court then considered the issue of permanent injunctive relief. The standard for a permanent injunction is identical to the standard for a preliminary injunction, except the protester must actually succeed on the merits of the case.

Success on Merits

On cross-motions for judgment on the administrative record, the government argued corrective action was required because the contracting officer erred in evaluating the protester's past performance, which led to the establishment of an improper competitive range. However, the competitive range was an unnecessary procedural step, and it was unclear whether the protester's past performance risk rating was incorrect. The government did not conduct discussions, and the solicitation stated the government did not intend to conduct discussions. Therefore, the competitive range described in FAR 15.306(c)(1) was inapplicable, and the government should have awarded the contract to the highest-rated offeror. Also, the record was "at best ambiguous" as to whether the CO erred in assigning the protester a "very low risk" rating. If there was an error in the evaluation, the corrective action should have involved reevaluation of proposals, not resolicitation of proposals.

Harm to Protester

The court then considered the remaining factors for permanent injunctive relief. Without an injunction, the protester would be exposed to irreparable harm arising from an unnecessary recompetition for a contract it already won, and it could lose the contract and the associated revenues. Also, the protester would be forced to recompete in circumstances where its winning price had been revealed to the competition. The government's asserted harms --construction delays and increased claims for equitable adjustment --would not necessarily result from a permanent injunction, and any harm from delays would be the result of the government's own creation. Finally, balancing the harm to the government against the public interest in maintaining the integrity of the procurement process also supported the issuance of a permanent injunction. (Sheridan Corp. v. U.S., et al., FedCl, 54 CCF 79,469)




(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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