On May 31, 2016, USSOCOM issued RFI No. H92222-16-GRAP02 in order to gather
information regarding “small businesses’ ability to support [Global Research and
Assessment Program] GRAP while ensuring compliance
with FAR 52.219-14, Limitations on Subcontracting.” AR 1. After reviewing responses from
interested contractors, USSOCOM concluded that “14 respondents were  capable of supporting
the GRAP requirements [and] the majority of respondents addressed FAR 52.219-14.” Id. at 156.
Satisfied that a small business could perform the GRAP requirements while complying with the
LOS clause, USSOCOM posted Solicitation H9222-17-R-0009 as a small business set-aside
incorporating the LOS clause on November 14, 2016. Id. at 354. Gallup is not a small business,
and thus was ineligible to compete under the Solicitation. Gallup challenged the rationality of
USSOCOM’s set-aside decision specifically arguing that the RFI responses did not indicate that
a small business could satisfy both the GRAP requirements and the LOS clause simultaneously.
Pl.’s Mot. at 1.
Gallup filed this bid protest on December 16, 2016. See Dkt. No. 1. The Government filed
the Administrative Record on January 6, 2017. See Dkt. No. 10. The Administrative Record
contains a key document entitled “Market Analysis (June 24, 2016)” which provides the only
record of USSOCOM’s evaluation of the RFI responses and basis for the small business set-aside
decision. AR, Index at 2, 156-60. First, the Market Analysis contains a “Memorandum for
Record” which includes the following pertinent language:
The GRAP team . . . reviewed the responses and consolidated
comments on the attached matrix, see Enclosure 1. [. . .] Of the 22
responses from small businesses, 14 respondents were determined
capable of supporting the GRAP requirements. While a majority of
responses addressed [the LOS clause], the responses from [three small
businesses] provided the most extensive and detailed information
regarding compliance with the clause. Based on the assessment of
responses received as detailed in the enclosure and with concurrence
from all members of the team, the responses were determined
sufficient and alleviated the government’s concerns. As such, the
GRAP acquisition will be processed as a small business set-aside.
Id. at 156 (emphasis added). The Contracting Officer, Ms. Julia A. DeLoach, signed the
Memorandum for Record. Id. While the document itself contains no date, the Index identifies
June 24, 2016 as the date of creation for the Memorandum of Record. Id., Index at 2. Second,
the Market Analysis contains an undated chart, referenced as “Enclosure 1” in the Memorandum
for Record, which summarizes the USSOCOM evaluation team’s comments on each RFI
response. Id. at 157-60. Importantly, the chart alone does not indicate that “[a] majority of
respondents addressed [the LOS clause].” Id. at 156. Instead, the chart contains a column entitled
“Plan for addressing at least 50%” (seemingly referring to the LOS clause) for which each RFI
response received a “yes” or “no,” with only three small businesses receiving a “yes.” Id. at 157-
60. Thus, the Memorandum for Record is the only consensus documentation of USSOCOM’s
decision to process the GRAP acquisition as a small business set-aside. Pursuant to normal Court
procedures, the Administrative Record also contains a “Certification of Contracting Office”
signed by Ms. DeLoach affirming that “after careful review, the following documents constitute
the record of administrative actions . . . .” Id., Certification following Index (emphasis added).
On March 27, 2017, after the parties completed briefing on their cross-motions for
judgment on the administrative record, the Government filed a Notice of Corrective Action stating
that “[b]ecause broader, more-integrated support services are now needed, USSOCOM has
determined that it is in the United States’ best interests to cancel the current small business setaside
procurement . . . .” Dkt. No. 21, at 1. In addition, the Government notified the Court that
on March 23, 2017 the Government learned the Memorandum for Record “had been prepared on
or about December 15, 2016, i.e., after the agency had proceeded with the procurement as a small
business set-aside and had received [Gallup’s] pre-filling notice regarding its putative protest (the
accompanying chart was created in June 2016).” Id. at 2. The Government further requested that
the Court cancel oral argument on the cross-motions scheduled for March 30, 2017. Id.
In order to “uncover the nature of the inaccuracy present in the administrative record and
determine whether any action should be taken by this Court”, the Court issued an Order retaining
the March 30, 2017 hearing date, and requiring “all those individuals who assisted in the
production of the administrative record” to attend the hearing. Dkt. No. 22, at 1.
At the hearing, the Court questioned Ms. DeLoach while she was under oath. DeLoach,
Tr. 14:22-25:20. Ms. DeLoach testified that she has worked as a Contracting Officer for
“probably 25 plus, maybe 30 years” and currently holds an “unlimited warrant.” Id. at 15:13-14,
15:21. She further testified that she personally compiled the Administrative Record in this case
without any assistance, including choosing the June 24, 2016 date for the Memorandum for
Record in the Index, and signed the Certification of Contracting Office. Id. at 16: 12-18, 21:15-
19; 24:15. Ms. DeLoach confirmed that the chart accompanying the Memorandum for Record
was created on June 24, 2016 and that it accurately represents the contemporaneous comments of
the USSOCOM evaluation team. Id. at 18:18-19:12. When presented with the Memorandum for
Record and asked to explain why she created the document, Ms. DeLoach responded:
[W]hen I received the pre-filing notice about December 13th, I said,
uh-oh, if [Gallup] really file[s], I need to make sure my record [is] in
good shape. […] I realized I had the [chart] with nothing that
consolidated that or nothing that summarized that and I prepared the
[Memorandum for Record] at that time, sir. I now know that  was a
huge mistake and I am deeply sorry that this has come to this. . . .
[T]he timing was wrong.
Id. at 20:6-18. Ms. DeLoach testified that she prepared the document on December 13th or 14th
of 2016 and no one assisted her.
Id. at 21:7, 27:2-5. Finally, Ms. DeLoach confirmed that the
GRAP acquisition was already “underway” when she created the Memorandum for Record and
thus the memorandum could not have been the basis for the agency’s set-aside decision. Id. at
22:19-25 (demonstrating the misleading nature of the Memorandum for Record’s forward-looking
statement: “As such, the GRAP acquisition will be processed as a small business set-aside.” AR
On March 30, 2017, immediately following the hearing, the Court issued an Order to Show
Cause stating that “the Court contemplates the imposition of sanctions against USSOCOM for
violating Rule 11(b)(3) of this Court” and ordered the Government to “explain why the Court
should not require USSOCOM to pay Gallup’s attorney’s fees and costs associated with the
prosecution of this bid protest.” Dkt. No. 23, at 1-2. RCFC 11(b)(3) requires all representations
made to the Court to have proper evidentiary support and RCFC 11(c) provides that “the court
may impose an appropriate sanction on any . . . party that violated [Rule 11(b)]”. Knowingly
providing inaccurate information to the Court is certainly grounds for sanctions under RCFC
11(c). See e.g., Jimenez v. Madison Area Tech. Coll., 321 F.3d 652, 655-57 (7th Cir. 2003)
(upholding sanctions against a party who presented manufactured documents to support
allegations in her complaint); Gonzales v. Trinity Marine Grp., Inc., 117 F.3d 894, 898-99 (5th
Cir. 1997) (holding that a court could issue sanctions for fabrication of evidence under its inherent powers); Pope v. Fed. Express Corp., 974 F.2d 982, 984 (8th Cir. 1992) (upholding sanctions
against a party who produced manufactured documents as an exhibit).
A recent bid protest before this Court, Coastal Environmental Group Inc. v. United States,
presents nearly identical facts to those here and further supports the imposition of sanctions in this
case. 118 Fed. Cl. 15 (2014). In Coastal Environmental Group, an EPA official included a
backdated document in the administrative record in order to “make it appear to anyone who read
the document that she prepared and signed the document ten months earlier than she actually did.”
Id. at 35. The official then “attempted to cure her oversight by preparing . . . a Determination and
Findings document.” Id. Accordingly, Judge Margaret Sweeney of this Court imposed sanctions
under RCFC 11(c) and ordered the agency to pay the plaintiff’s attorney’s fees and costs and a
$1,000.00 fine. Id. at 38. Ms. DeLoach also realized her record was incomplete and attempted to
“cure her oversight” by preparing a Memorandum for Record nearly six months after USSOCOM
made its set-aside decision.
On April 12, 2017, the Court held a telephonic status conference at the request of the parties
during which counsel for the Government indicated (and confirmed in writing the same day) that
the parties had “reached an agreement in principle for USSOCOM to pay Gallup’s attorney fees
and litigation costs . . . as contemplated by the Court’s order.” Dkt. No. 28, at 1. In addition, the
Government noted that USSOCOM will:
issue guidance to its contracting staff emphasizing the importance of
completeness, accuracy, and integrity in preparing records and
accompanying certifications [and] is in the process of planning a
training session . . . that will focus on issues of accuracy and ethics in
preparing and certifying administrative records.
Id. at 1-2. Therefore, the Government does not dispute the appropriateness of sanctions in this
case. Id. at 2. Gallup is “satisfied that these actions, once consummated, will constitute an
adequate remedy for the problems identified with the administrative record . . . .” Dkt. No. 29, at
1. Given this agreement, the formal imposition of sanctions under RCFC 11(c) is unnecessary.
The Government will file a status report on or before May 17, 2017 indicating what progress has
been made towards the payment of Gallup’s attorney’s fees and costs and the implementation of
USSOCOM’s proposed ethics guidance and training session.
The integrity of the administrative record, upon which nearly every bid protest is resolved,
is foundational to a fair and equitable procurement process. While the Government has accepted
responsibility for its misconduct, the importance of preventing a corrupted record cannot be
overstated. The Court encourages USSOCOM to take all reasonable steps to ensure that its
contracting office appreciates the necessity of conducting a well-documented, well-reasoned procurement and producing a meticulous and accurate record for review. The Court will not
tolerate agency deception in the creation of the administrative record. (Gallup,
Inc. v. U. S., No. 16-1656C, April 25, 2017)
3. The Court’s Ruling.
In this case, the Government’s first explanation, as to why RCFC 11(b) sanctions are not
warranted, is that the Government’s August 23, 2016 Response to Plaintiff’s August 11, 2016
Motion For Judgment On The Administrative Record And Cross Motion and the Government’s
September 15, 2016 oral statement “Must Be Viewed As A Whole.” Gov’t Resp. at ii, 10–14. In
support, the Government cites two non-precedential decisions from another jurisdiction and a 1989
text for the proposition that: “the focus of . . . rule  is the court paper as a whole, not individual
phrases or sentences construed separately or taken out of context.” Gregory P. Joseph, Sanctions:
The Federal Law of Litigation Abuse § 9(D) at 133–34 (1989); see also Young v. City of Providence
ex. rel Napolitano, 404 F.3d. 33, 41 (1st Cir. 2005) (“The general rule is that statements must be
taken in context, and that related parts of a document must be taken together.” (internal citations
omitted)). None of these sources are helpful to the Government.
The United States Court of Appeals for the First Circuit in Navarro-Ayala v. HernandezColon,
3 F.3d 464 (1st Cir. 1993) reversed a trial court’s decision to impose Rule 11 sanctions for
failing to make a “reasonable inquiry.” Gov’t Resp. at 11. In this case, however, the court made
that inquiry, therefore complying with RCFC 11(c), in the December 5, 2016 Memorandum
Opinion. See 129 Fed. Cl. at 509. In addition, in Navarro-Ayala v. Hernandez-Colon, that federal
appellate court found that the plaintiff’s written motion contained “no significant false statements”
and was “not literally false.” 3 F.3d at 467. In this case, however, the Government’s August 23,
2016 Cross Motion And Response To Level 3’s August 23, 2016 Motion For Judgment On The
Administrative Record affirmatively represented that Verizon would “begin performance on
December 1, 2016.” ECF No. 36 at 25 (emphasis and bold added).
As such, the Government’s
August 23, 2016 Response was a “significant false statement.” Navarro-Ayala, 3 F.3d. at 467.
Nor was the Government’s August 23, 2016 written representation to the court an “isolated factual
error,” as the colloquy between the court and Government’s counsel at the September 15, 2016
oral argument evidences. 9/15/16 TR at 40–43.
Likewise, the Government’s statement of the “Proceedings Before This Court” in its
January 17, 2017 Response, omits any reference to the September 15, 2016 Oral Argument (ECF
No. 62 at 2–6), but instead represents that “[i]t was not until the November 14, 2016 hearing that
the [Government] realized that a misunderstanding had developed between the parties and the
court.” Gov’t Resp. at 6 (citing A27 Bigler Decl. at ¶¶ 4–5). In addition, the Government’s prior
misrepresentation was exacerbated by the Government’s failure to inform the court—at least on
November 1, 2016—that Verizon completed work on the circuit and turned it over to DISA.
11/14/16 TR at 9–10; see also Town of Tiverton, 469 U.S. at 240 (“It is appropriate to remind counsel that they have a ‘continuing duty to inform the Court of any developments that may
conceivably affect the outcome’ of the litigation.” (quoting Fusari, 419 U.S. at 391 (Burger, C.J.,
To place the Government’s conduct in further context, it is important to understand that, in
fiscal 2016 alone, approximately 120 bid protests were filed in the United States Court of Federal
Claims. These cases take precedence over all other cases on the docket, because the complaint
almost always demands issuance of a temporary and/or permanent injunction to prohibit the
Government from performing work under a contract. In addition, as the Government was well
aware, in fiscal 2016, the court operated with 10 active judges, instead of the 16 authorized. But
even not all of those 10 active judges could accept bid protests, because they were in trial or for
other administrative reasons. Therefore, it was not unusual for the judges available to accept bid
protests to be assigned two and sometimes three or more bid protests in a month. It is also
important to understand that the Administrative Record in bid protest cases is not made available
to the plaintiff or the court for at least a week and sometimes longer; briefing usually does not
follow for several additional weeks. Therefore, the court must rely on the Government’s
representation as to the precise status of contract performance to ascertain whether the
circumstances warrant an injunction. If the Government will not voluntarily stay performance, the
court is then faced with the dilemma of having to consider whether to issue an injunction, without
a full record, to preserve plaintiff’s ability potentially to be reconsidered and awarded the contract
at issue. In this case, the court initially decided not to issue an injunction, because of the
Government’s representation that no significant work on the contract would take place before
December 1, 2016. Therefore, the Government’s written and oral representations “taken in
context” and “taken as a whole” were not accurate. See Young, 404 F.3d at 41. The most important
issue at the time of the Government’s written and oral representations was whether a temporary or
permanent injunction was warranted. As the transcript of the September 15, 2016 oral argument
shows—if the only work that Verizon was doing was to “get their subcontracts in place, all their
permits in place, things like that, and make sure they’re ready on December 1st” ( 9/15/16 TR
(Gov’t Counsel) at 41)—then an injunction was not warranted. But, that representation was not
The Government’s second explanation as to why sanctions are not warranted, in this case,
is that the “Government’s Factual Contentions Were Accurate And Supported By A Declaration.” Gov’t Resp. at ii, 14–15. Here, the Government relies on the July 15, 2016 unclassified Schmitt
Declaration, that reported: “on 29 June 2016, the [C]ontracting [O]fficer lifted the stop work order
and established new service date for STM–64 as 1 December 2016, based upon Verizon’s lead
time of 150 days to provide service.” 7/15/16 Schmitt Decl. at ¶ 8. The fact that the CO established
a new service date, “as 1 December 2016” is consistent with the Government’s August 23, 2016
Response that Verizon would “begin performance on December 1, 2016,” since some portion of
the 150 days to prepare for performing the March 8, 2016 contract, i.e., testing the circuit, hiring
subcontractors and obtaining permits, would have taken place by December 1, 2016. 9/15/16 TR
at 40–41 (Gov’t Counsel: “[Verizon has] got to set the circuit up and test it . . . They get their
subcontracts in place, all their permits in place, things like that[.]”). If that was true, it was
reasonable for the court to assume that Verizon could not only commence contract performance
on December 1, 2016, but also be able to complete that work in December 2016.
The Government’s third explanation as to why sanctions are not warranted, in this case, is
that the Government’s August 23, 2016 representation that “Verizon would begin performance on
December 1, 2016” was “to make the point that, if the court entered an injunction, the
telecommunications circuit would not be ready by December 1, 2016.” Compare ECF. No. 36 at
25 with Gov’t Resp. at 15. In the court’s judgment, based on all the circumstances and in context,
the Government’s August 23, 2016 representation that “Verizon would begin performance on
December 1, 2016” (ECF No. 36 at 25) was made for the sole purpose of persuading the court not
to enter an injunction, so that Verizon could continue and complete performance of the circuit,
depriving Level 3 of the opportunity to do that work, and receive the [dollar amount] that the
Government now owes Verizon. ECF No. 50 at ¶ 12.
The Government’s fourth and final explanation as to why sanctions are not warranted, in
this case, is that the court was advised on August 1, 2016, that the CO lifted the stop order on June
28, 2016, after the GAO denied Level 3’s protest, and established a “new service date.” ECF No.
62 at 16 (citing 8/1/16 TR at 5). It is true that “[the Government’s] counsel could not be charged
with misrepresenting a fact to the court when the court itself knew the true facts and thus could
not have been misled by the less-than-clear assertions by the party subject to the sanctions order.”
1-10 Industry Associates, LLC, 528 F.3d at 868 (citing Young, 404 F.3d at 41 ). But, in this case,
the Government’s August 1, 2016 statement that the CO lifted the stay order and established a new
service date was followed on August 23, 2016 by a written statement to the contrary—that Verizon
“would begin performance on December 1, 2016” (ECF No. 36 at 25) and repeated at the
September 15, 2016 oral argument, 9/15/16 TR at 40 (Gov’t Counsel: “Verizon, right now, is
preparing to perform on December 1st.”) (emphasis and bold added). Therefore, it was
reasonable for the court to rely on what appeared to be the Government’s change in position,
particularly since the transcript of the subsequent September 15, 2016 oral argument evidences
that the court repeatedly asked the Government’s counsel to define precisely what it meant by the
term “preparing to perform” (9/15/16 TR at 40), and “what [is] Verizon preparing” (9/15/16 TR at
RCFC 11(b) contains four prerequisites, before the court may impose a sanction. See
RCFC 11(b)(1)–(4). In this case, the written and oral statements made by the Government to the
court must be excused under RCFC 11(b)(3) and (4), under an “objective reasonableness
standard.” See 1-10 Industry Assoc’s, 528 F.3d at 869 (“Other courts applying the objective
reasonableness standard have pointed out that the test “is one of reasonableness under the
circumstances.”(quoting White v. Gen. Motors Corp., 908 F.2d 675, 680 (10th Cir. 1990))). This
is so because, RCFC 11(b) provides that a factual contention need not have evidentiary support at
the time it is made, provided that it “will likely have evidentiary support after a reasonable
opportunity for further investigation or discovery.” If this is the standard, than it appears to the
court that this Rule serves no purpose, since any savvy advocate can generate post-conduct
evidence to “paper over” and justify a misrepresentation to the court. Fortunately the United States
Supreme Court may have recognized the potential loopholes in Federal Rule of Procedure 11,
when it held in Chambers v. NASCO, Inc., 501 U.S. 32 (1990), that “where the conduct at issue is
not covered by one of the other sanctioning provisions . . . a federal court [is not] forbidden to
sanction bad-faith conduct by means of the inherent power . . . . [I]f[,] in the informed discretion
of the court, neither the Statute nor the Rules are up to the task, the court may safely rely on its
inherent power.” Id. at 50. In this case, in the court’s judgment, considering the totality of circumstances, and the context of the Government’s statements, this is not a case where there was
a “miscalculation of facts,” as in 1-10 Industry Associates, 528 F.3d at 870, but a breach of the
duty of candor. See Precision Specialty Metals, 315 Fed. Cir. at 1357–58 (“Without regard to
whether [the Government’s counsel’s] misconduct violated Rule 11, the sanction imposed upon
[counsel] would have been sustainable under the inherent power to control and specify the
standards of lawyers before it.”).
For the aforesaid reasons, the court has determined that the Government did not violate RCFC 11(b), but violated the duty of candor to the court. Mr. Douglas Mickle, the direct
supervisor of the Government’s counsel in this case, has appeared before the court in other cases,
where Mr. Mickle’s substantive expertise and professional conduct always has reflected the
highest standard that the court expects from all counsel, most importantly the Government’s
counsel. Some forty-plus years ago, the court, as a GS-12 trial lawyer in the Department of Justice,
was trained to be truthful, direct, and complete in all communications with federal judges. “First
and always,” in the words of my supervising chief. Maybe times have changed. Maybe not. In
any event, the court has determined to rely on Mr. Mickle’s professional judgment as to whether
Robert C. Bigler should receive an adverse report in his annual performance review or other actions
to impress, not only on him, but on other Government lawyers who practice before the United
States Court of Federal Claims and other federal courts, that the duty of candor matters.
Communications, LLC v. U. S. and Verizon Deutschland GmbH,
No. 16-829, March 16, 2017)
This bid protest concerns the Defense Information Systems Agency’s decision to award a
federal contract for construction and maintenance of a Structured, High Availability
Telecommunications Circuit between Wiesbaden, Germany and Arifjan, Kuwait to Verizon
Deutschland GmbH at a price of $38.6 million more than the bid of Level 3 Communications,
LLC, the company that had been performing on the job for several years. Today, the court has
entered an injunction to prohibit any further work from being performed under this contract, but
also ordered the Defense Information Systems Agency (“DISA”) to provide its files in this matter
to the Inspector General of the Department of Defense for further investigation, particularly in
light of the fact that lawyers from the Department of Justice and DISA informed the court, both in
writing and at oral argument, that performance would not commence until December 1, 2016. In
fact, performance began on June 29, 2016 and DISA "accepted" a completed telecommunications
circuit on November 1, 2016—only a few days before the November 8, 2016 election. Although
the court has authority to issue sanctions against the lawyers involved, the Inspector General has
authority to ensure the integrity of the procurement process, and the Senate Armed Services
Committee has oversight responsibility determine whether the American taxpayers are served by
this type of procurement, albeit in support of our military requirements in the Middle East.
On September 15, 2016, the court convened an Oral Argument on the parties’ CrossMotions
For Judgment On The Administrative Record. ECF No. 42 (“9/15/2016 TR”). During
the Oral Argument, the court suggested that Level 3 file an Amended Complaint, since the July
12, 2016 Complaint did not identify which statutes or regulations that DISA violated by granting an award to Verizon. 9/15/2016 TR at 6–7. In addition, the court asked the Government’s counsel
about the status of the contract, and the Government represented that Verizon was preparing to
perform on December 1, 2016:
[THE COURT]: So tell me what’s happening right now. Verizon has the contract.
What are they doing?
[THE GOVERNMENT]: No, I know, Your Honor. Verizon, right now, is preparing
to perform on December 1st.
9/15/2016 TR at 40 (emphasis added).
On September 29, 2016, Level 3 filed an Amended Complaint. ECF No. 43.
On November 9, 2016, the court’s law clerk sent an e-mail to the parties to inquire whether
Verizon still intended to commence performance on December 1, 2016. ECF No. 52.
November 10, 2016, the Government responded that: “Verizon was able to complete the circuit
ahead of schedule and the Government accepted the circuit and began using the circuit on
November 1, 2016.” ECF No. 52.
On November 14, 2016, the court convened a hearing to confirm the current status of the
contract. ECF No. 48 (“11/14/16 TR”). During the hearing the Government represented that DISA
had accepted a complete circuit from Verizon on November 1, 2016. 11/14/16 TR at 4. The
Government confirmed that it failed to inform either the court or Level 3 that performance
commenced prior to December 1, 2016. 11/14/16 TR at 9.
In response, on that same day, the court issued a Memorandum Opinion And Temporary
Restraining Order, prohibiting DISA from allowing Verizon to continue performing under the
contract. See Level 3 Communications, LLC v. United States, No. 16-829, 2016 WL 6694969, at
*3 (Fed. Cl. Nov. 14, 2016).
On November 18, 2016, the Government filed a sealed status report to update the court
about the work that Verizon performed to date and the amount that has been paid or is due to
Verizon. ECF No. 50. In an attached declaration, the CO stated that Verizon began the
“provisioning process to install the circuit per the contract,” on June 29, 2016, after GAO issued
its ruling, and that Verizon completed work on the circuit on November 1, 2016. ECF No 50-1 at
¶¶ 5–6. In addition, the CO stated that, under Verizon’s offer, the set up process carried a $ […]
“non-recurring cost,” that would be billed to DISA. ECF No. 50-1 at ¶ 13. Since DISA accepted
the circuit on November 1, 2016, the court was informed that Verizon apparently was also owed
$ […] for one month of service. ECF No 50-1 at ¶ 13.
On November 21, 2016 the Government submitted an additional status report, confirming
that contract “performance” commenced on June 29, 2016. ECF No. 51 at 7.
On or before January 3, 2017, the Government is advised to show cause why the
Government’s written and oral representations to the court that performance of the contract with Verizon would not commence until December 1, 2016 does not violate RCFC 11(b).
In addition, the court hereby orders the Defense Information Systems Agency promptly to
provide all pleadings, the Administrative Record, and all Memorandum Opinion and Orders in this
case to the Inspector General of the Department of Defense for investigation into why the
Contracting Officer awarded the contract at issue to Verizon at a price of $38.6
million more than the incumbent contractor and proceeded to
commence performance contrary to written and oral
representations to the court – and prior to the November 8, 2016
In that regard, the court
also intends to forward the public record in this case to the
Senate Armed Services Committee for such oversight as it deems
Communications, LLC v. U. S. and Verizon Deutschland GmbH,
No. 16-829 December 5, 2016
The court has concluded that Ms. Nero and Ms. Thomas acted in bad faith when they
prepared a Determination and Findings document, and subsequently included that document in
the supplemental administrative record, with the knowledge that the document was backdated
and contained inaccurate information, and with the further knowledge that the supplemental
administrative record would be used in proceedings in the Court of Federal Claims. The court
has also concluded that Ms. Thomas acted in bad faith by representing in her certification of the
supplemental administrative record that she carefully reviewed the record and that the record
constituted the record of the actions taken by the EPA that were relevant to plaintiff’s protest,
because she acknowledged that she did not review the record and because the record contained
an inaccurate, backdated document.
The bad faith conduct of Ms. Nero and Ms. Thomas caused plaintiff’s counsel, defense
counsel, and the court to question the integrity of the administrative record compiled by the EPA.
Given that one document was created ten months after the fact for the purposes of litigation,
could it be that other documents were similarly created for the purposes of litigation? Does the
false certification of one part of the administrative record call into question the authenticity of the
certification of the rest of the administrative record? The resulting investigation into these
questions, and the subsequent efforts to address and resolve the issues raised by that investigation, required the expenditure of significant resources–both time and money–by counsel
and the court. These were resources that could have been devoted to addressing the merits of the
protest or devoted to work on matters unrelated to this protest. In sum, there is no question that
the actions of Ms. Nero and Ms. Thomas had significant adverse consequences in this protest.
As previously stated, RCFC 11(c)(4) provides that sanctions are meant to deter future
misconduct. Deterrence is particularly important in this case due to the presumption that federal
government contracting officials perform their duties in good faith. See Am-Pro Protective
Agency, Inc. v. United States, 281 F.3d 1234, 1239 (Fed. Cir. 2002) (holding that a contractor
was unable to “overcome the strong presumption that government contract officials exercise their
duties in good faith”); accord U.S. Postal Serv. v. Gregory, 534 U.S. 1, 10 (2001) (noting that “a
presumption of regularity attaches to the actions of Government agencies”); Schism v. United
States, 316 F.3d 1259, 1302 (Fed. Cir. 2002) (en banc) (“This presumption of regularity is the
supposition that public officers perform their duties correctly, fairly, in good faith, and in
accordance with law and governing regulations, and is valid and binding unless ‘well-nigh
irrefragable proof rebuts or overcomes it.’” (citation omitted) (quoting Alaska Airlines, Inc. v.
Johnson, 8 F.3d 791, 795 (Fed. Cir. 1993))). That presumption is overcome when contracting
officials take actions similar to those taken by Ms. Nero and Ms. Thomas in this case, i.e.,
preparing a backdated, inaccurate document; including that document in the supplemental
administrative record; and then certifying the integrity of the record. One of the court’s goals in
sanctioning the bad faith conduct of the contracting officer and her supervisor in this case is to
deter further similar misconduct by contracting officials.
Based on the severity of Ms. Nero’s and Ms. Thomas’s misconduct, the court concludes
that under RCFC 11(c)(4), the EPA should reimburse plaintiff for the reasonable attorney’s fees
and expenses it incurred to address that conduct, beginning on March 6, 2014, the date that Mr.
Wolak advised plaintiff’s counsel that there might be an issue with the Determination and
Findings document, and ending on June 12, 2014, the date that plaintiff filed its brief regarding
the court’s inherent power to impose sanctions.11 In addition, due to the resources expended by
the court in addressing the issues raised by the inaccurate, backdated document and false
certification that defendant filed with the court, the court concludes that, as permitted by RCFC
11(c)(4), the EPA should pay a monetary penalty to the court of $1,000. These sanctions are the
least severe sanctions that would deter further similar misconduct by Ms. Nero, Ms. Thomas,
other EPA personnel, and other contracting officials. (Coastal Environmental Group, Inc. v. U. S., No. 13-71C, August 25,
This case is before the Court on a Motion by bid
protest Intervenor Rowe Contracting Services, Inc. (“Rowe”) for Rule 11 sanctions against the Plaintiff,
The Ravens Group, Inc. (“Ravens”), and its attorney, . . . .
Rowe’s Motion presents two justifications for
sanctioning Ravens. It charges Ravens with making unverified and baseless accusations of improper conduct
against Rowe and its President, Scott Rowe. The Motion also asserts that many of Ravens’
legal arguments were so deficient as to be frivolous and thus subject to Rule 11
A. The Rule 11 Legal Standard
Rule 11 of the Rules of the United States Court of Federal Claims (“RCFC”) is
patterned after Rule 11 of the Federal Rules of Civil Procedure. Judin v. United
States, 110 F.3d 780, 784 (Fed. Cir. 1997). The Federal Circuit has held that its
rulings under Rule 11 of the Federal Rules are applicable to RCFC 11. Id. The Rule requires
that every pleading filed by a party be signed by the party’s attorney. RCFC 11(a)
(“Every pleading, motion, and other paper shall be signed by or for the attorney of
record in the signing attorney’s own individual name . . . . ”). The attorney’s signature acts
as a certification that the pleading is well-grounded in fact, has a basis in law,
and is not filed for an improper purpose. View Eng'g, Inc. v. Robotic Vision Sys., 208 F.3d 981,
984 (Fed. Cir. 2000); see also RCFC 11(b).
Rule 11 is aimed at curbing baseless filings by parties that burden the courts
and cause needless expense and delay. See Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 397-98 (1990). The Advisory Committee Notes to the 1993 amendments to the
Rule are instructive on this point: “The [R]ule  require[s] litigants to ‘stop
before initially making legal or factual contentions.” Fed. R. Civ. P. 11 (Notes
of Advisory Committee on 1993 Amendments). The Rule therefore requires that parties
make a reasonable inquiry of the applicable law and underlying facts to ensure
that claims brought before the court are not frivolous. Persyn v. United States, 35
Fed. Cl. 708, 712 (1996). The reasonableness of a party’s pre-filing inquiry is measured
by an objective standard. See id. A party’s good faith belief in the merits of
an argument is not sufficient to avoid sanction. See Bus. Guides, Inc. v. Chromatic Commc’ns.
Enters., Inc., 498 U.S. 533, 548-49 (1991).
Rule 11 authorizes the court to sanction an attorney for failure to comply with
its requirements. Fed. R. Civ. P. 11(c); RCFC 11(c). The court may sanction the
attorney to the extent sufficient to deter the repetition of such conduct. Fed. R. Civ.
P. 11(c)(2); RCFC 11(c)(2). The sanction may consist of, or include, nonmonetary directives,
an order to pay a penalty to the court, or an order directing payment to the movant
of reasonable attorneys’ fees and other expenses incurred as a direct result of the
Rule 11 violation. Fed. R. Civ. P. 11(c)(2); RCFC 11(c)(2).
We believe that this language provides a legal basis for the argument set forth
Ravens’ Complaint. Although Ravens’ interpretation of this FAR clause may be
strained, Rule 11 does not require that the legal contentions set forth in a
correct, only that they have some basis in existing law. See Saladino v. United
63 Fed. Cl. 754, 757 (2005) (“A legal argument that ultimately is incorrect . .
. does not
necessarily equate to one that is not warranted by existing law or by a
argument for its extension.’”) (quoting RCFC 11(b)(2)).
We further note that Ravens’ attorney dropped this contention at oral argument.
Rather than insist that exercise of the options was the functional equivalent of
value” contract award, Ravens’ attorney argued instead that his client relied on
of the options as evidence that award of the contract was no longer in
Opinion at 11. We ultimately dismissed Count II for failure to state a claim
relief could be granted because Ravens’ attorney was unable to demonstrate how
alleged “reliance” altered his client’s circumstances or what prejudice it
suffered. Id. (p. 16)
We rejected Ravens’ argument as not being persuasive. Opinion at 12.
However, the fact that Ravens’ claim was dismissed on the merits does not mean
sanctions are warranted. See Fed. R. Civ. P. 11 (Notes of Advisory Committee on
1993 Amendments) (“The certification is that there is (or likely will be)
support’ for the allegation, not that the party will prevail with respect to its
regarding the fact . . . . [The rendering of] summary judgment . . . against a
not necessarily mean . . . that [the party] had no evidentiary support for its
As set forth in the Complaint, Count IV was poorly crafted and based on weak
was not frivolous. Cf. Saladino, 63 Fed. Cl. at 757-58 (finding that the theory
by the plaintiff was frivolous and “wholly without merit” because the theory had
discredited when another judge of the Court of Federal Claims ruled against the
in a separate, previously filed case and because binding precedent applicable to
claims had warned litigants that “pressing such claims would be sanctionable”).
We decline to impose sanctions on Ravens or its attorney. In doing so, we do not
express our approval of Ravens’ performance in this Court. To the contrary, we
frustration with Ravens’ inability to present its arguments logically. In the
Court will not tolerate the presentation of claims by Ravens or its attorney
that are clearly
outside the Court’s jurisdiction or which lack a firm factual or legal basis.
(The Ravens Group, Inc., v. U. S. and Rowe
Contracting Services, Inc., No. 07-243C, Filed October 31, 2007) (pdf)