GAO Sanctions, COFC, Rule 11:  Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions

Comptroller General - Key Excerpts

Abuse of Process and Suspension

The protest at issue here is very similar to the many other protests filed by Latvian Connection. In implementing CICA’s mandate, our Office has devised simple and flexible procedures that are easy to follow, and have as a basic principle, elimination of barriers to filing a protest. By design, our procedures make it easy and inexpensive for a party to file and pursue a protest where that party has a legitimate belief that some aspect of a federal acquisition has been conducted improperly.

However, our Office necessarily reserves an inherent right to dismiss any protest, and to impose sanctions against a protester, where a protester’s actions undermine the integrity and effectiveness of our process. PWC Logistics Servs. Co. KSC(c), B‑310559, Jan 11, 2008, 2008 CPD ¶ 25 at 12. The inherent right of dispute forums to levy sanctions in response to abusive litigation practices is widely recognized and has been characterized by the Supreme Court as “ancient in origin,” and governed not by rule or statute, but by the control necessarily vested in a forum to manage its own affairs. Roadway Express, Inc. v. Piper et al., 447 U.S. 752, 765 (1980).

As detailed above, Latvian Connection has filed an exceptionally large number of protests in fiscal year 2016. These filings reflect a larger pattern of vexatious protesting that dates back several years. As set forth above, these protests have challenged an array of acquisitions conducted by a host of contracting agencies worldwide. In the overwhelming majority of these protests, the record has demonstrated that Latvian Connection either was not an interested party to challenge the agency’s actions, or raised challenges that were legally insufficient. In other words, Latvian Connection--time and again--either has failed to demonstrate that it was capable of, or interested in, performing the solicited requirements, or that it had a legitimate basis to question an agency’s actions.

Indeed, despite filing protests challenging hundreds of federal procurements, there is little or no evidence that this company has the requisite direct economic interest in any of these procurements. Publicly available information provides no evidence that Latvian Connection has successfully performed even a single government contract, and there is no evidence in the many cases presented to our Office to suggest that Latvian Connection engages in any government business activity whatsoever beyond the business of filing bid protests.

It has become evident to our Office, and to procuring activities across the government, that Latvian Connection’s protests are not filed for the purpose of allowing the firm to compete on a relatively equal basis for a requirement that it is capable of, and interested in, performing. Moreover, the effect of Latvian Connection’s protests is to hector the acquiring activities--and our forum--with a stream of protests that divert our collective time and resources. In the cases described above, and in the many, many other cases Latvian Connection has filed, attorneys for procuring agencies have prepared responses to Latvian Connection’s protests on the basis that Latvian Connection is not an interested party to challenge these procurements; that its protests are procedurally infirm in one way or another; or that they simply are without merit. Correspondingly, our Office has expended significant resources to process Latvian Connection’s filings, review the facts and law, and respond meaningfully and equitably to Latvian Connection’s contentions.

The wasted effort related to Latvian Connection’s filings is highlighted by its latest series of protests (including the current protest) challenging acquisitions that were conducted years ago, where performance is complete and there is no possible remedy available. These protests have placed a burden on GAO, the agencies whose procurements have been challenged, and the taxpayers, who ultimately bear the costs of the government’s protest-related activities. When presented with evidence, as here, that Latvian Connection does not hold the umbrella ID/IQ contract under which the order was issued, or that the order involves an amount lower than the statutory threshold for GAO’s task order jurisdiction, Latvian repeatedly fails to engage with the issues. Instead, the company simply files a lengthy, often unrelated, harangue that does not address the threshold issues that must be answered by any forum as part of its review.

We conclude that the above-described litigation practices by Latvian Connection constitute an abuse of our process, and we dismiss the protest on this basis. Although dismissal for abuse of process or other improper behavior before our Office should be employed only in the rarest of cases, it is appropriate here where we find that Latvian Connection’s abusive litigation practices undermine the integrity and effectiveness of our process. See PWC Logistics Servs. Co. KSC(c), supra.

In addition, because of these abusive litigation practices, and to protect the integrity of our bid protest forum and provide for the orderly and expedited resolution of protests, we are suspending Latvian Connection from protesting to our Office for a period of one year as of the date of this decision. We are taking this action to conserve limited government resources that would otherwise be expended to respond to meritless protests filed by an entity with no direct economic interest in the outcome (as required by our statute and regulations). We are also taking this action because we have seen no evidence that Latvian Connection is prepared to engage constructively on the issues raised by the protests it files.

Our forum remains available to protesters with legitimate concerns regarding the propriety of an agency’s procurement activities, and we stand ready to entertain protests from Latvian Connection at the end of this period--provided those protests raise legitimate concerns in acquisitions where Latvian Connection has a direct economic interest in the outcome, and is prepared to engage substantively on the issues it raises. But we also conclude that allowing this pattern of abuse to continue uninterrupted serves no useful purpose.

We do not take these actions lightly. We understand that we temporarily are foreclosing to Latvian Connection one avenue of redress that ordinarily would be available to a concern interested in competing for a federal contract to contend that the government has taken action that violates procurement laws and regulations. 31 U.S.C. § 3554. Nonetheless, on balance, suspending for one year Latvian Connection’s eligibility to file protests with our Office may incentivize the firm to focus on pursuing legitimate grievances in connection with acquisitions for which there is evidence that Latvian Connection actually is interested in competing.

Our bid protest process does not provide, and was never intended to provide, a platform for the complaints of businesses or individuals that, to all outward appearances, have no actual interest in, or capability to perform, the government contracting opportunities to which they have objected. Nor, as a forum for the expeditious and inexpensive resolution of bid protests, are we required to endure baseless and abusive accusations.

By separate letter of today to Latvian Connection, we are advising the firm, and its principal, that both will be precluded from filing a protest in our Office for a period of one year from the date of this decision. As set forth above, if, at the end of this period, Latvian Connection wishes to raise concerns that an agency has violated procurement laws or regulations in an acquisition where Latvian Connection has a direct economic interest, and Latvian Connection demonstrates that it is prepared to engage substantively on the issues it raises, we will again accept its protests in our forum.  (Latvian Connection LLC B-413442: Aug 18, 2016)

Clearly, there has been a violation of the protective order here. Although the partner and the associate explain that certain circumstances regarding the process of creating redacted party-unique versions of documents led to the violation, there is no question, and it is not disputed by any of the attorneys involved, that protected versions of the protected comments and the protected response, containing information proprietary to Anham, were improperly disclosed to PWC personnel. As noted above, our Regulations provide for the imposition of appropriate sanctions in the case of a violation. Consistent with our Office's practice, any sanctions concerning the individuals admitted to the protective order here will be separately considered by our Office subsequent to, and separate from, the resolution of the protest.

This case, however, involves more than a protective order violation. Although the protective order itself applies only to the individuals admitted under it, our bid protest forum cannot function effectively if the parties before us--both counsel admitted to a protective order and their clients who have not been admitted to it--do not treat protected information appropriately. For that reason, our Office's concern, when nonpublic information obtained through our protective order has been improperly released, goes beyond the individuals admitted to that order. We view it as self-evident that a participant in our protest process who was not admitted to a GAO protective order cannot retain a document, however obtained, if the document bears a legend clearly identifying it as protected. In our view, that individual's responsibility, once he or she sees the protective legend, is to immediately close the document, advise his or her counsel admitted to the protective order of the disclosure, and turn the protected document over to counsel (or destroy it); retaining the document is improper.

Based on our review of the record, we agree with intervenor's counsel and the Army that the actions of the PWC employees to whom the protected material was disclosed were inconsistent with, and undermined, the integrity of our Office's bid protest process. Although a number of facts remain unclear or are disputed, all parties acknowledge that PWC's Chief of Contract Administration and PWC's Vice President/General Counsel each improperly received from the associate on November 29 the protected comments and protected response. It is also clear that these documents bore on each page the notation –PROTECTED MATERIAL TO BE DISCLOSED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER,— and that even a cursory review of the protected comments would reveal that they contained technical, cost and price information proprietary to Anham. It is also undisputed that these documents remained in PWC's Chief of Contract Administration's e-mail (and thus his possession and control) until at least December 6, and in PWC's Vice President/General Counsel's e-mail (and thus his possession and control) until at least December 8 (the protected response) and December 13 (the protected comments), and that at least the protected response was provided to at least 10 other PWC employees.[9]

Moreover, PWC concedes that its Vice President/General Counsel forwarded, at a minimum, the protected response to three other PWC personnel (including PWC's Chief of Contract Administration), and that at least one of these individuals (other than PWC's Chief of Contract Administration) read, to some extent, the protected response. PWC Submission (Dec. 17, 2007), Tab 5, Declaration of PWC Vice President/General Counsel, at 3; Tab 7, Declaration of PWC Executive Regional Director Middle East, at 4-5. Additionally, it is clear from the record that PWC's Chief of Contract Administration forwarded the protected response, at a minimum, to 10 other PWC personnel (including PWC's Vice President/General Counsel), and that at least 5 of these individuals read, to some extent, the protected response. PWC Submission (Dec. 17, 2007), Tab 4, Declaration of PWC's Chief of Contract Administration, at 5; Tab 12, Declaration of PWC's Senior Contracts Manager-Iraq, at 3; Tab 15, Declaration of PWC's Contract Manager, at 3; Tab 18, PWC's Deputy Program Manager, at 3; Tab 19, Declaration of PWC's Chief Executive Officer and President International, at 3; Tab 20, Declaration of PWC's Program Manager, at 3. Additionally, with the exception of the declaration of PWC's Vice President/General Counsel, there is no explanation in any of the declarations submitted by the PWC personnel of why the declarant(s) believed it permissible to read or even possess (and, in some instances, forward to other PWC personnel) documents labeled as protected and subject to the protective order issued by our Office.

Furthermore, as argued by Anham's counsel and the Army, other facts as set forth by the partner, the associate, and certain PWC personnel are internally inconsistent. For example, as noted previously, the associate represented in his December 11 explanation (prior to the intervenor's request for summary dismissal and our Office's request for a more complete explanation) that PWC's Vice President/General Counsel and PWC's Chief of Contract Administration –[r]ead— both the protected comments and the protected response. However, in his December 17 submission to our Office, the partner asserts that –it appears that neither— PWC's Vice President/General Counsel nor PWC's Chief of Contract Administration had –read— the protected comments. Protester's Submission (Dec. 17, 2007) at 2, 7. This assertion is apparently based on the December 17 declaration of PWC's Vice President/General Counsel, where, in direct contradiction of the previous representation, he states that he had –deleted— without reading the e'mail containing the protected comments based upon his –belief— that the e-mail was a duplicate of the associate's e'mail that included the protected response as an attachment. Protester's Submission (Dec. 17, 2007) at 6-7; see Tab 5, Declaration of PWC's Vice President/General Counsel, at 3. The partner also notes that, according to PWC's Chief of Contract Administration's December 17 declaration, that individual did not open the attachments to the e-mails from the associate (contradicting the associate's December 11 submission), but reviewed the attachments to the e'mail that he received from PWC's Vice President/General Counsel, which assertedly only contained the protected response, and then forwarded this attachment to the 10 PWC employees. Protester's Submission (Dec. 17, 2007) at 7; see Tab 4, Declaration of PWC's Chief of Contract Administration, at 3-4.

The partner explains the discrepancy between the associate's December 11 explanation to our Office that unequivocally stated that both PWC's Vice President/General Counsel and PWC's Chief of Contract Administration had –[r]ead— the protected comments, and the later assertions that neither PWC's Vice President/General Counsel nor PWC's Chief of Contract Administration had read or reviewed the protected comments, by stating that at the time the December 11 explanation was submitted, counsel for PWC, –having had little ability to interview the two gentlemen, . . . perhaps too hastily, chose to be conservative and stated that both recipients had read 'both of the documents.'— Protester's Submission (Dec. 20, 2007) at 7. The partner asserts here that after –talking with [PWC's Vice President/General Counsel and PWC's Chief of Contract Administration] at length, it became apparent that neither of them had read the [protected] [c]omments and they so declared.— Id.

In our view, the partner's explanations do little to clarify the issue. For example, they do not adequately explain why the recollections of PWC's Vice President/General Counsel and PWC's Chief of Contract Administration, as to what occurred between November 29 and December 5, were less accurate on December 11 than they were in their declarations of December 17. Nor do we find the partner's explanation of December 17 persuasive, given, among other things, the statement in PWC's Chief of Contract Administration's declaration that he –remember[ed] the attachments seeming to do an effective job of responding to the assertions it stated were made by Anham— (which suggests through the use of the plural –attachments— that he also read the more detailed protected comments).  PWC Submission (Dec. 17, 2007), Tab 4, Declaration of PWC's Chief of Contract Administration, at 4.

Leaving aside the inconsistencies, we can return to the undisputed facts. Employees at PWC who inappropriately received the two protected documents retained them for approximately one week, until counsel directed them to destroy them. Some of those PWC employees read, to some extent, at least one of the documents; some of them then disseminated at least one of the documents to other PWC employees. While the protester (both the client and counsel) would have us focus on whether the individuals admit –reading— or only –scanning— the protected documents, on how long this action lasted, on whether anyone remembers the contents of the protected documents, and on whether only one, rather than both, of the protected documents were looked at, these are all irrelevant to the fundamental question of whether the individuals acted improperly by retaining the documents, since even a short glance at any page of either document would ensure that the protected legend was seen.

We turn then to consideration of the request that the protest be dismissed because of this improper action. We have recognized that where a protester's actions undermine the protective order's effectiveness, and thereby the integrity of our Office's bid protest process, it is appropriate to consider dismissing the protest to protect the integrity of that process. We view our authority to impose dismissal or other sanctions as inherent, as do courts. Network Sec. Techs., Inc., B'290741.2, Nov. 13, 2002, 2002 CPD para. 193 at 8; see Roadway Express Inc. v. Piper, 447 U.S. 752, 754 (1980); Reid v. Prentice'Hall, 261 F.2d 700, 701 (6th Cir. 1958) (–[e]very litigant has the duty to comply with reasonable orders of the court, and if such compliance is not forthcoming, the court has the power to apply the penalty of dismissal—).

We recognize that dismissal is a severe sanction, and that it should be employed only in the rarest of cases. Indeed, we are acutely aware, and it weighs against the dismissal, of the general public policy favoring a decision on the merits. Balanced against these factors are a number of other factors that lead us to conclude that dismissal is appropriate here. As discussed below, those factors are the inadequacy of lesser available sanctions, the protester's (as opposed to its counsel's) responsibility for what occurred, the gravity of what occurred and the prejudice to the intervenor and the agency resulting from it, and the salutary deterrent effect of dismissal on others who might be tempted to such conduct in the future. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 643 (1976); Alaska Pulp Corp. v. United States, 41 Fed. Cl. 611, 614'15 (1998); Griffin & Dickson v. United States, 16 Cl.Ct. 347, 351 (1989).

A number of –lesser sanctions— considered by the courts, such as the imposition of fines or costs, are unavailable to our Office, and other lesser sanctions are, in our view, inadequate. In particular, the possible –lesser sanction— of admonishment or other measures aimed at PWC's outside counsel who are admitted to the protective order do not address the conduct of the protester itself, which, as set forth above, we find troubling. Those employees of the client, not their outside counsel, are responsible for their conduct, and a sanction directed at counsel does not reach that conduct. Moreover, the PWC employees had at least constructive notice, from both our Bid Protest Regulations and our decision in Network Sec. Techs., Inc., supra, that a protester's actions in the context of a violation of the protective order could result in dismissal of the protest. Hence, PWC cannot view our consideration of dismissal for the mishandling of protected information as unfair or unexpected.

Regarding prejudice, protester's counsel, in arguing that dismissal is not appropriate, points out that the PWC employees that submitted declarations that recall receiving the protected comments and/or the protected response, state that they have little or no recollection of the contents of the protected documents, and that a number of the PWC personnel state in their declarations that they do not even recall reading to any extent the protected comments or the protected response. Counsel for the protester argues that because the PWC personnel cannot recall the contents of the protected comments and the protected response, there was little or no harm caused by the disclosure of the protected documents. Protester's counsel explains that the PWC personnel did not read the protected documents because they were either too busy, or because PWC does not view Anham (the awardee of the subject procurement, for which PWC was the incumbent contractor) as a major competitor. PWC Submission (Dec. 20, 2007) at 9. Protester's counsel concludes that, because in his view Anham has suffered no competitive harm from the disclosure of the protected comments and protected response to PWC personnel, it would be inappropriate to dismiss the protest.

Given the self-serving nature of the declarations relied on in this argument by counsel, and our agreement with the Army and intervenor that the declarations and explanations submitted are both incomplete and inconsistent, we find them to be of little probative value. Moreover, unlike the protester's focus on whether the various PWC employees who received the protected information read it, merely skimmed it, or forgot what they did read, our analysis of prejudice should focus more on the nature of the information provided to those employees and the length of time that they retained it. As discussed above, the information included in the protected comments, and to a lesser extent, the protected response is sensitive and proprietary to Anham, so that, faced with its undisputed transmission to PWC employees and their retention of it, we find that the potential for prejudice to Anham was significant.

Finally, we return to our concern for protecting the effectiveness of the protective order process and the integrity of our bid protest system. Private parties and agencies whose information, whether proprietary or source-selection-sensitive, is provided under the aegis of our protective orders need to have the assurance that our Office will be vigilant in protecting that information, to the extent that we are able to do so. Any individual who might be inclined to show little respect for the protective order process must know that a lack of due care in the handling of protected information will not be tolerated and may lead, in the appropriate circumstances, to dismissal of a protest. Having considered the entire record, we conclude that that is the appropriate course here.

The protest is dismissed.  (PWC Logistics Services Company KSC(c) B-310559: Jan 11, 2008)

Comptroller General - Listing of Decisions

For the Government For the Protester
Latvian Connection LLC B-413442: Aug 18, 2016.  
PWC Logistics Services Company KSC(c) B-310559: Jan 11, 2008  

U. S. Court of Federal Claims- Key Excerpts

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 156).

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 [11] 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., concurring))).

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 accurate.

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 40).

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.  (Level 3 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.

(sections deleted)

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. On 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.

(sections deleted)

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 election.

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 appropriate.

Level 3 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, 2014)  (pdf).

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, . . . .

(Sections deleted)

III. Discussion

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 sanctions.

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 and think’ 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).

Count II

We believe that this language provides a legal basis for the argument set forth in 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 pleading are correct, only that they have some basis in existing law. See Saladino v. United States, 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 ‘nonfrivolous 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 a “best value” contract award, Ravens’ attorney argued instead that his client relied on exercise of the options as evidence that award of the contract was no longer in contention. See Opinion at 11. We ultimately dismissed Count II for failure to state a claim upon which relief could be granted because Ravens’ attorney was unable to demonstrate how this alleged “reliance” altered his client’s circumstances or what prejudice it suffered. Id. (p. 16)

Count IV

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) ‘evidentiary support’ for the allegation, not that the party will prevail with respect to its contention regarding the fact . . . . [The rendering of] summary judgment . . . against a party does not necessarily mean . . . that [the party] had no evidentiary support for its position.”). As set forth in the Complaint, Count IV was poorly crafted and based on weak facts, but was not frivolous. Cf. Saladino, 63 Fed. Cl. at 757-58 (finding that the theory presented by the plaintiff was frivolous and “wholly without merit” because the theory had been discredited when another judge of the Court of Federal Claims ruled against the plaintiff in a separate, previously filed case and because binding precedent applicable to his claims had warned litigants that “pressing such claims would be sanctionable”). (p. 18)

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 note our frustration with Ravens’ inability to present its arguments logically. In the future, this 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)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
The Ravens Group, Inc., v. U. S. and Rowe Contracting Services, Inc., No. 07-243C, Filed October 31, 2007  (pdf) Gallup, Inc. v. U. S., No. 16-1656C, April 25, 2017
  Level 3 Communications, LLC v. U. S. and Verizon Deutschland GmbH, No. 16-829, March 16, 2017
  Level 3 Communications, LLC v. U. S. and Verizon Deutschland GmbH, No. 16-829 December 5, 2016
  Coastal Environmental Group, Inc. v. U. S., No. 13-71C, August 25, 2014  (pdf).

U. S. Court of Appeals for the Federal Circuit - Key Excerpts

New On appeal, the government contends, on behalf of itself and Mr. Bigler, that the Court of Federal Claims abused its discretion in using its inherent authority to impose sanctions. The government argues that this is so because the court did not make the required finding of fraud or bad faith against either the government or Mr. Bigler and because, in any event, there is no support in the record for such a finding. The government also argues that the court deprived both it and Mr. Bigler of due process because the order to show cause stated that the court was contemplating Rule 11 sanctions, but did not mention the possible use of its inherent authority, and did not mention that the imposition of sanctions was contemplated against Mr. Bigler individually. See Corrected Appellants Br. 14–16. For the following reasons, we hold that the record in this case does not support the imposition of sanctions. The Court of Federal Claims therefore erred in sanctioning the government and Mr. Bigler. In view of our disposition of the case, it is not necessary for us to address the government’s due process argument.

Central to the issue before us are the telephone status conference held on August 1, 2016, the government’s filing of August 23, 2016, and the hearing convened on September 15, 2016. As seen, on August 1, the parties explained to the court that Verizon was working on Phase 1 of the contract, doing what it had to do in order to be able to begin performance of Phase 2 on December 1, 2016. Thereafter, in its August 23 filing, the government represented that Verizon’s circuit would not be operational until December 1. And subsequently, at the September 15 hearing, the focus of the court’s discussion with Mr. Bigler was on the question of what Verizon had been doing since August 1. Mr. Bigler informed the court that Verizon was “preparing to perform,” by which he meant that Verizon was in the process of setting up the circuit and testing it to make sure that it worked, so that Phase 2 contract performance could begin on December 1.

Thereafter, upon learning that Verizon had in fact completed its Phase 1 work early and had commenced Phase 2 performance on November 1 without notice from the government to the court or Level 3, the court, on November 14, expressed its displeasure with the government and Mr. Bigler. It stated that it had been the court’s “impression” at the conclusion of the proceedings on September 15 that all that would happen until the court decided the cross-motions was Verizon’s continuing Phase 1 work. The court stated at the November 14 proceedings that, under these circumstances, it believed that it had been misled by the government and Mr. Bigler. The order to show cause followed. As seen, the focus of the order to show cause was upon “the [g]overnment’s written and oral representations that performance of the contract with Verizon would not commence until December 1.” App. 51.

The concern expressed by the court on November 14 is understandable. The government should have informed Level 3 and the court that Verizon had completed the Phase 1 work early and that Phase 2 performance was about to begin. Nevertheless, we do not believe that the record reveals a sufficient basis for finding “the conscious doing of wrong because of dishonest purpose or moral obliquity” that is required in order to support the imposition of sanctions under the court’s inherent authority.

We say this for several reasons. As to Phase 1 work, Mr. Bigler, as well as Level 3 itself, expressly indicated, correctly, that “performance” of that part of the contract was in fact under way. As to Phase 2, Mr. Bigler did make a representation—that Phase 2 would not begin before December 1—that turned out in retrospect to be incorrect. But nothing in the record suggests that, when Mr. Bigler made the statements he did on August 1, August 23, and September 15, he believed they were not correct or he was attempting to deceive the court. And there is no basis in the several colloquies with the court, which were not entirely clear as to exactly what contract “performance” was being discussed in particular passages, for finding any clear agreement by the parties and the court as to what was to happen if the time came for a transition from Phase 1 to Phase 2. Moreover, the August 1 colloquy indicated agreement by the government and Level 3 that, even if Phase 2 were to begin, Level 3 would still anticipate a full 60 month service period were it to win the bid protest and then be awarded the contract in place of Verizon. In short, based upon the record before us, we are unable to conclude that the government, through Mr. Bigler, could be found to have knowingly and intentionally made misrepresentations to the court as to when Phase 2 contract performance would start or to have acted with a dishonest purpose or other bad faith in failing to update the information on November 1.


For the foregoing reasons, the Sanctions Order is reversed.  (Level 3 Communications, LLC v. U. S. and Verizon Deutschland GmbH, Robert C. Bigler, 2017-1924, 2017-2068, January 30, 2018)

U. S. Court of Appeals for the Federal Circuit - Listing of Decisions

For the Government For the Protester
New Level 3 Communications, LLC v. U. S. and Verizon Deutschland GmbH, Robert C. Bigler, 2017-1924, 2017-2068, January 30, 2018  


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