Oak Grove Technologies, LLC v. United States
U.S. Court of Appeals for the Federal Circuit
Oak Grove Technologies, LLC v. United States
Opinion
Case: 22-1556 Document: 117 Page: 1 Filed: 09/16/2024
United States Court of Appeals
for the Federal Circuit
______________________
OAK GROVE TECHNOLOGIES, LLC,
Plaintiff-Appellee
v.
UNITED STATES, F3EA, INC.,
Defendants-Appellants
______________________
2022-1556, 2022-1557
______________________
Appeals from the United States Court of Federal
Claims in No. 1:21-cv-00775-MHS, Judge Matthew H. Sol-
omson.
______________________
OPINION ISSUED: September 11, 2024
OPINION MODIFIED: September 16, 2024 ∗
______________________
CRAIG HOLMAN, Arnold & Porter Kaye Scholer LLP,
Washington, DC, argued for plaintiff-appellee. Also repre-
sented by THOMAS PETTIT.
WILLIAM JAMES GRIMALDI, Commercial Litigation
Branch, Civil Division, United States Department of Jus-
tice, Washington, DC, argued for defendant-appellant
∗ This opinion has been modified and reissued to cor-
rect typographical errors on page 2.
Case: 22-1556 Document: 117 Page: 2 Filed: 09/16/2024
2 OAK GROVE TECHNOLOGIES, LLC v. US
United States. Also represented by BRIAN M. BOYNTON,
PATRICIA M. MCCARTHY, DOUGLAS K. MICKLE, JOSEPH ALAN
PIXLEY; MICHAEL RAY TREGLE, JR., Contract Litigation &
Intellectual Property Division, United States Army Legal
Services Agency, Fort Belvoir, VA.
JOSHUA ALLAN MULLEN, Womble Bond Dickinson (US)
LLP, Nashville, TN, argued for defendant-appellant F3EA,
Inc. Also represented by RAYMOND BENNETT, Raleigh, NC.
______________________
Before PROST, STOLL, and STARK, Circuit Judges.
STARK, Circuit Judge.
This bid protest action originated with the United
States Department of the Army (“Army” or “agency”)
awarding a contract to F3EA, Inc. (“F3EA”). Another bid-
der, Oak Grove Technologies, LLC (“Oak Grove”), protested
the award, including by filing suit in the Court of Federal
Claims. The Court of Federal Claims agreed with Oak
Grove that the bidding process had gone awry and, there-
fore, enjoined the Army from proceeding with its award to
F3EA. It further ordered the Army either to begin the pro-
curement process anew or reopen it to conduct discussions
with, and accept revised final proposals from, multiple of-
ferors, including Oak Grove. The trial court also sanc-
tioned the government for repeatedly failing to include
material evidence in the administrative record. Both F3EA
and the government appeal the trial court’s judgment and
the injunction. The government additionally appeals the
trial court’s sanctions order. We vacate the judgment and
the injunction, affirm the sanctions order, and remand for
further proceedings.
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OAK GROVE TECHNOLOGIES, LLC v. US 3
I
A
The contract at issue here is called “Special Operations
Forces Requirements, Analysis, Prototyping, Training, Op-
erations and Rehearsal,” or “SOF RAPTOR.” J.A. 2650. As
the name implies, SOF RAPTOR is a contract vehicle that
the Army uses for procuring training services for its special
forces. When the predecessor contract to the one at issue
here was set to expire, the Army issued a solicitation (“So-
licitation,” “Request for Proposals,” or “RFP”) for SOF
RAPTOR IV, a small business set-aside, single-award, in-
definite delivery indefinite quantity (“IDIQ”) contract with
an order ceiling of $245 million. In the Solicitation, the
Army required offerors to include in their proposals four
volumes addressing the following factors: (1) capability, (2)
past performance, (3) cost/price, and (4) administrative.
See J.A. 2764-65. The Solicitation provided that the capa-
bility, past performance, and cost/price volumes would be
evaluated in that order of importance. See J.A. 2778. The
Solicitation did not include any criteria for evaluating the
“administrative” volume. The government indicated that,
in evaluating proposals, it “may use information other than
that provided by Offeror in its evaluation . . . includ[ing]
DCAA [Defense Contract Audit Agency], DCMA [Defense
Contract Management Agency], Government Databases
and past performance questionnaires.” J.A. 2777.
The Solicitation explained that the capability factor in-
cluded three technical subfactors, and that a rating of “un-
acceptable” or “marginal” in any of the three subfactors
would result in an “unacceptable” or “marginal” rating for
the overall capability factor, rendering a proposal “una-
wardable.” J.A. 3547-48. The “program management sub-
factor” required the offeror to demonstrate the ability to
address, among other things, “[m]anagement [s]tructure,”
J.A. 2766, 2778. In connection with “[m]anagement
[s]tructure,” an offeror was required to “identify all
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4 OAK GROVE TECHNOLOGIES, LLC v. US
teaming arrangements, partnerships, joint venture owner-
ship and contingencies, as applicable, within this descrip-
tion.” Id.
Relatedly, the Solicitation required offerors to submit
“all executed teaming arrangements” and provided that
“any previous teaming arrangements . . . that [are] refer-
enced within the proposal shall be included as attachments
in the admin volume as supporting documentation.”
J.A. 2775. The Solicitation also stated that “any modifica-
tions to a teaming arrangement must be reviewed by the
Contracting Officer before the effective date of such modi-
fication in order to ensure that there [are] no negative im-
pacts on contract performance, in accordance with FAR
[Federal Acquisition Regulation] 9.603.” J.A. 2771. As rel-
evant here, FAR § 9.603 provides that “[t]he Government
will recognize the integrity and validity of contractor team
arrangements; provided, the arrangements are identified
and company relationships are fully disclosed in an offer
or, for arrangements entered into after submission of an
offer, before the arrangement becomes effective.”
Past performance was evaluated for relevancy (i.e.,
“Very Relevant,” “Relevant,” “Somewhat Relevant,” or “Not
Relevant”) and confidence (i.e., “Substantial Confidence,”
“Satisfactory Confidence,” “Neutral Confidence,” “Limited
Confidence,” or “No Confidence”). J.A. 2784-85. For
Cost/Price factor, the Solicitation specified that the “DCAA
will be requested to perform a Financial Capability Risk
Assessment for the Prime offeror” and that “[t]he Prime of-
feror must be deemed financially responsible by the Con-
tracting Officer based on the Financial Capability Risk
Assessment.” J.A. 2783. As relevant here, FAR § 9.103(a)
provides that “[p]urchases shall be made from, and con-
tracts shall be awarded to, responsible prospective contrac-
tors only.” Because SOF RAPTOR IV is a small business
set-aside contract, FAR § 9.105-2(a)(2) also requires that
“[i]f the contracting officer determines that a responsive
small business lacks certain elements of responsibility,”
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OAK GROVE TECHNOLOGIES, LLC v. US 5
the contracting officer shall “[r]efer the matter to the cog-
nizant SBA [Small Business Administration],” FAR
§ 19.602-1(a)(2). Once the SBA assesses the financial re-
sponsibility of the small business, FAR § 9.105-2(a)(2) re-
quires “the contracting officer [to] accept the Small
Business Administration’s decision to issue a Certificate of
Competency and award the contract to the concern.”
B
Oak Grove, F3EA, and Lukos-VATC III, LLC (“Lukos”)
were among the ten offerors that timely submitted pro-
posals to be awarded the SOF RAPTOR IV contract. Oak
Grove and F3EA were both members of Raptor Training
Services, LLC, a joint venture that had been awarded the
predecessor contract, SOF RAPTOR III.
The Army initially screened proposals to ensure that
all necessary information was submitted. Later, source se-
lection evaluation board (“SSEB”) teams were assigned to
evaluate and rate proposals. A person identified as “RM”
was the chairperson of the overall SSEB and, in that ca-
pacity, RM received all reports from various teams within
the SSEB. See J.A. 2700 (showing source selection team
structure); J.A. 2690-91 (outlining roles and responsibili-
ties of SSEB). RM, as chairperson, was responsible for pre-
paring a comprehensive and accurate proposal evaluation
report (“PER”), containing “the adjectival assessments for
each factor and subfactor as well as a Cost/Price report and
the supporting rationale.” J.A. 6 (citation omitted). The
PER was provided to the source selection advisory council
(“SSAC”), which, in turn, provided the source selection au-
thority (“SSA”) with a source selection decision recommen-
dation. The SSA was an individual designated to make the
best-value source selection decision.
Ultimately, the Army awarded the SOF RAPTOR IV
contract to F3EA after rating F3EA’s proposal as having
the highest technical rating and the lowest price among the
three proposals that received an acceptable (or better)
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6 OAK GROVE TECHNOLOGIES, LLC v. US
capability rating. Specifically, the Army rated F3EA’s pro-
posal, which had a price of $4.35 million, as “Outstanding”
in each capability subfactor and assigned it a “Very Rele-
vant” and “Substantial Confidence” rating for past perfor-
mance. J.A. 3587. By comparison, Lukos’ proposal, which
had a higher price of $4.78 million, was rated only “Good”
for the capability factor and “Somewhat Relevant” and
“Neutral Confidence” for past performance. J.A. 3588.
Oak Grove’s proposal was deemed unawardable because
the agency rated it “Unacceptable” for the capability factor.
J.A. 3587.
C
Shortly after the SOF RAPTOR IV contract was
awarded to F3EA, Oak Grove filed a protest with the Gov-
ernment Accountability Office (“GAO”), raising numerous
challenges to the Army’s evaluation of Oak Grove’s own
proposal and to the Army’s decision to award the contract
to F3EA. Among Oak Grove’s allegations was that F3EA
improperly benefited from unequal access to information,
resulting in a prohibited organizational conflict of interest
(“OCI”). As support for its accusation, Oak Grove submit-
ted two emails it had received from former F3EA employ-
ees. In those emails, the employees alleged that they had
overheard conversations between an employee of F3EA
and RM, the chairperson of the SSEB, regarding “the in-
tent for F3EA to get the work,” J.A. 1546 (internal quota-
tion marks omitted), and that RM had steered the contract
award to F3EA by deliberately selecting the sample task
orders (“STO”) that F3EA had performed under the prede-
cessor SOF RAPTOR III contract, J.A. 1620-21. Oak Grove
also alleged that F3EA had a role in drafting the STOs.
Shortly after filing its protest at the GAO, Oak Grove sent
a notice of possible Procurement Integrity Act (“PIA”) vio-
lations to the contracting officer.
Soon thereafter, the Army issued a notice of corrective
action, stating:
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OAK GROVE TECHNOLOGIES, LLC v. US 7
The Army will reevaluate proposals con-
sistent with the solicitation, determine the
impact of the reevaluations on the source se-
lection decision, and document its reevalua-
tions and new best value determination. . . .
Additionally, the Army has initiated an inves-
tigation in accordance with FAR 9.505 to de-
termine the validity of the organizational
conflict of interest (OCI) allegations in Oak
Grove’s protest. The Army will also investi-
gate the allegations set forth in Oak Grove’s
January 29, 2020 Notice of Possible Procure-
ment Integrity Act Violations in accordance
with FAR 3.104. The Army will take appro-
priate action as necessary based on the re-
sults of the information gathered during the
investigation.
J.A. 1623. The GAO then dismissed Oak Grove’s protest,
finding that “[t]he agency’s corrective action render[ed] the
protest academic.” J.A. 1625.
On February 18, 2020, the contracting officer issued a
memorandum summarizing the findings from the investi-
gation he had undertaken of Oak Grove’s OCI and PIA al-
legations. As part of that investigation, members of the
SSEB provided written statements and were interviewed,
uniformly denying that they had ever heard RM discussing
influencing the procurement for the benefit of F3EA. The
contracting officer also obtained a written statement from
RM, also denying Oak Grove’s allegations. Neither RM nor
the former F3EA employees who had sent the emails on
which Oak Grove’s allegations rested were interviewed.
On May 1, 2020, the contracting officer issued another
memorandum, noting that the emails from the former
F3EA employees “did not provide a timeline of when the
statements and discussions [involving RM] occurred, the
topics of discussion and who were other parties that were
present.” J.A. 3441. Based on the findings of the
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8 OAK GROVE TECHNOLOGIES, LLC v. US
investigation, the contracting officer ultimately concluded
that Oak Grove’s allegations were not credible and that the
alleged OCI and PIA violations could not be substantiated.
On August 28, 2020, after reevaluating the proposals,
the Army once again awarded the SOF RAPTOR IV con-
tract to F3EA, having concluded once more that F3EA was
the offeror having the highest technical rating and the low-
est price at $4.35 million. Lukos’ proposal, which had a
price of $4.73 million, was rated “Good” for the capability
factor and “Relevant” and “Satisfactory Confidence” for
past performance. Id. Proposals from the remaining offe-
rors, including Oak Grove, were deemed unawardable be-
cause the agency rated them “Marginal” or “Unacceptable”
for the capability factor.
On September 9, 2020, Oak Grove filed a second pro-
test with the GAO, raising the same issues it had presented
in the first protest. On December 18, 2020, the GAO denied
the protest, concluding that the agency was reasonable in
assessing Oak Grove’s proposal as unawardable. See
J.A. 3677.
D
On January 21, 2021, Oak Grove filed its complaint
against the United States in the Court of Federal Claims.
The complaint alleged that the agency: (1) inadequately in-
vestigated whether the chairperson, RM, steered the pro-
curement award to F3EA (Count I); (2) awarded the
contract to F3EA despite the existence of biased ground
rule or unequal information OCIs (Count II); (3) violated
FAR § 1.602-2 and FAR § 3.101-1 (Count III), which re-
quire the government and its contracting officers to avoid
any conflict of interest in Government-contractor relation-
ships and to treat contractors impartially, fairly, and equi-
tably; (4) abused its discretion in failing to engage in
discussions or clarifications with Oak Grove (Count IV); (5)
arbitrarily assessed weaknesses to various sections of Oak
Grove’s proposal (Counts V-VIII); (6) misevaluated Lukos’
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OAK GROVE TECHNOLOGIES, LLC v. US 9
proposal (Count IX); and (7) awarded F3EA the contract
despite various critical deficiencies with its proposal
(Counts X-XII). J.A. 9. F3EA intervened.
The Court of Federal Claims granted Oak Grove’s mo-
tion for judgment on the administrative record and en-
joined the Army from proceeding with its contract award to
F3EA. It wrote:
Given the defects in F3EA’s and Lukos’ re-
spective proposals . . . , the Agency’s failure to
conduct discussions, as well as the Agency’s
inadequate investigation into alleged wrong-
doing by the [chairperson, RM], the [c]ourt
concludes that it has no choice but to order the
Agency either: (1) to resolicit this procure-
ment from its inception; or (2) to reopen the
procurement to conduct discussions and ac-
cept new final proposal revisions from offe-
rors.
J.A. 51. The trial court also denied the government’s mo-
tion to dismiss Oak Grove’s complaint for lack of standing.
E
In a separate order, the Court of Federal Claims sanc-
tioned the government under Rule 11 of the Rules of the
United States Court of Federal Claims (“RCFC”) for failing
to compile a complete administrative record. Over the
course of the litigation, the trial court had directed the gov-
ernment, on numerous occasions, to file certain documents
that had been omitted from the administrative record orig-
inally filed by the government. See J.A. 735-36, 1017-18,
1114-15. Among them were a letter from the SSA termi-
nating RM’s appointment as SSEB Chairperson, J.A. 3950,
and a report from the DCMA recommending “No Award”
for Lukos based on its financial capability, which the court
found to be highly relevant to the issues in the litigation.
J.A. 3937-39; see also J.A. 67, 70, 80. As sanctions for its
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10 OAK GROVE TECHNOLOGIES, LLC v. US
failings, the government was ordered “to pay the legal costs
and expenses [Oak Grove] incurred in dealing with the ad-
ministrative record issues for which the government was
responsible throughout this litigation.” J.A. 81.
F
The government and F3EA timely appealed. We have
jurisdiction under 28 U.S.C. § 1295(a)(3).
II
We review the Court of Federal Claims’ “determination
on the legal issue of the government’s conduct, in a grant
of judgment upon the administrative record, without defer-
ence.” Per Aarsleff A/S v. United States, 829 F.3d 1303,
1309(Fed. Cir. 2016) (internal quotation marks and cita- tion omitted). “This means that we apply the arbitrary and capricious standard . . . anew.” Centech Grp., Inc. v. United States,554 F.3d 1029, 1037
(Fed. Cir. 2009) (internal quo- tation marks omitted). We review determinations of stand- ing under the Tucker Act de novo. See SEKRI, Inc. v. United States,34 F.4th 1063, 1070
(Fed. Cir. 2022). How- ever, underlying factual findings, including prejudice, are reviewed for clear error. See CliniComp Int’l, Inc. v. United States,904 F.3d 1353, 1357-59
(Fed. Cir. 2018); see also Bannum, Inc. v. United States,404 F.3d 1376
, 1357 (Fed.
Cir. 2005) (“[T]he trial court’s factual determination on
prejudice . . . is entitled to review for clear error like any
finding in a bench trial, and the special concerns applicable
to bid protest actions do not alter that review here.”).
The Administrative Procedure Act (“APA”) supplies the
standard of review in bid protests. See 28 U.S.C.
§ 1491(b)(4); Axiom Res. Mgmt., Inc. v. United States,564 F.3d 1374, 1381
(Fed. Cir. 2009). The APA standard asks whether the agency’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”5 U.S.C. § 706
(2)(A); see also Banknote Corp. of Am., Inc. v. United States,365 F.3d 1345
, 1350 (Fed. Cir. 2004). Case: 22-1556 Document: 117 Page: 11 Filed: 09/16/2024 OAK GROVE TECHNOLOGIES, LLC v. US 11 Hence, the court may overturn the challenged agency deci- sion if it “lacked a rational basis” or “involved a violation of regulation or procedure.” Axiom,564 F.3d at 1381
(inter-
nal quotation marks and citation omitted).
In handling a bid protest case, the Court of Federal
Claims “may award any relief that the court considers
proper, including declaratory and injunctive relief.” 28
U.S.C. § 1491(b)(2). Before granting injunctive relief, the trial court “must consider whether (1) the plaintiff has suc- ceeded on the merits, (2) the plaintiff will suffer irreparable harm if the court withholds injunctive relief, (3) the bal- ance of hardships to the respective parties favors the grant of injunctive relief, and (4) the public interest is served by a grant of injunctive relief.” Centech Grp.,554 F.3d at 1037
. “We give deference to the Court of Federal Claims’ decision to grant or deny injunctive relief, only disturbing the court’s decision if it abused its discretion.” PGBA, LLC v. United States,389 F.3d 1219, 1223
(Fed. Cir. 2004). An abuse of discretion exists where the court has “made a clear error of judgment in weighing the relevant factors or exer- cised its discretion based on an error of law or clearly erro- neous fact finding.”Id.
(internal quotation marks and
citation omitted).
Accordingly, here, we review without deference the
Court of Federal Claims’ analysis of whether the Army’s
evaluations of the offers were arbitrary and capricious.
However, we review the court’s holding that Oak Grove
was prejudiced by these evaluations for clear error. We re-
view the imposition of sanctions for abuse of discretion.
III
The parties raise numerous procedural and substan-
tive arguments. With respect to procedure, Oak Grove ar-
gues that the government’s corrective action renders this
appeal moot, while F3EA and the government contend that
Oak Grove lacks standing because it has not been preju-
diced. We reject each of these positions. After doing so, we
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12 OAK GROVE TECHNOLOGIES, LLC v. US
turn to the substantive issues. We agree with F3EA and
the government that the Army’s award to F3EA was not
arbitrary and capricious, rejecting Oak Grove’s contentions
that (1) the agency was required to hold discussions, an is-
sue we do not resolve on the merits because Oak Grove
waived its argument, (2) F3EA was required to include
teaming agreements in its proposal, and (3) the agency’s
investigation into RM’s alleged misconduct was inade-
quate. We further agree with F3EA and the government
that the trial court erred in finding that Lukos’ proposal
was ineligible for award. Finally, we disagree with the gov-
ernment’s contention that the Court of Federal Claims
abused its discretion by imposing Rule 11 sanctions.
A
1
We begin by explaining our rejection of Oak Grove’s
suggestion that this appeal is moot. Oak Grove’s mootness
contention is grounded in the fact that after the Court of
Federal Claims entered judgment, the government reo-
pened the procurement, engaged in discussions with cer-
tain offerors, requested and evaluated revised proposals,
and reopened its investigation into the SSEB’s chairper-
son’s alleged misconduct. However, as the government
points out – without dispute from Oak Grove – the Army
“has no[t] issued any new contract nor has the agency reso-
licited its requirements.” Gov’t Reply Br. at 2. Thus, if
F3EA and the government prevail on appeal, the Army
may be “in a position to reinstate[] the original award [to
F3EA], which would obviate any need to continue its con-
tingent corrective action.” Id. at 3. Additionally, absent
this appeal, the government would have no mechanism to
attempt to overturn the sanctions order. Because both
F3EA and the government could be in better positions if
they press and prevail on appeal than if there could be no
appeal, their appeals are not moot, notwithstanding the
government’s corrective actions. See Acceleration Bay LLC
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OAK GROVE TECHNOLOGIES, LLC v. US 13
v. 2K Sports, Inc., 15 F.4th 1069, 1076 (Fed. Cir. 2021)
(“The test for mootness is whether the relief sought, if
granted, would make a difference to the legal interests of
the parties . . . .”) (internal quotation marks and citation
omitted).
2
A second preliminary procedural issue is whether Oak
Grove has standing to press its bid protest claims. Because
we find no clear error in the Court of Federal Claims’ fac-
tual finding that Oak Grove was prejudiced by the agency’s
procedure, we do not agree with F3EA and the government
that Oak Grove lacks standing.
Under the Tucker Act, the Court of Federal Claims has
jurisdiction over cases brought “by an interested party ob-
jecting to . . . the award of a contract” by a federal agency.
28 U.S.C. § 1491(b)(1). “To satisfy § 1491(b)(1)’s standing requirements,” the plaintiff “must make two showings.” CliniComp,904 F.3d at 1358
. First, the plaintiff “must show that it is an ‘interested party.’”Id.
An “interested party” objecting to a contract award is an “actual or pro- spective bidder[] or offeror[] whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” Rex Serv. Corp. v. United States,448 F.3d 1305, 1307
(Fed. Cir. 2006) (internal quotation marks and emphasis omitted). “[T]o prove a direct eco- nomic interest,” such a plaintiff “must show that it had a substantial chance of winning the contract.” CliniComp,904 F.3d at 1358
. In this way, the “interested party” re- quirement – which is statutory, not jurisdictional – “im- poses more stringent standing requirements than Article III.” Weeks Marine, Inc. v. United States,575 F.3d 1352, 1359
(Fed. Cir. 2009); see also CACI, Inc.-Fed. v. United States,67 F.4th 1145, 1151
(Fed. Cir. 2023).
“Second, the plaintiff must show that it was prejudiced
by a significant error in the procurement process.” Clini-
Comp, 904 F.3d at 1358. The requirement to show Case: 22-1556 Document: 117 Page: 14 Filed: 09/16/2024 14 OAK GROVE TECHNOLOGIES, LLC v. US prejudice, like the “interested party” requirement, is stat- utory and not jurisdictional. See CACI,67 F.4th at 1153
(“[T]he issue of prejudice is no longer jurisdictional unless it implicates Article III considerations.”). “To establish prejudice,” a plaintiff objecting to a contract award “must show that there was a ‘substantial chance’ it would have received the contract award but for the alleged error in the procurement process.” Info. Tech. & Applications Corp. v. United States,316 F.3d 1312, 1319
(Fed. Cir. 2003).
For purposes of evaluating standing, “[i]n assessing
whether a party was prejudiced by purported errors in a
procurement process, we must assume that the party will,
if permitted to proceed with its claim, prevail on the mer-
its.” REV, LLC v. United States, 91 F.4th 1156, 1164 (Fed.
Cir. 2024). Hence, in undertaking the standing analysis
here, we must presume that Oak Grove will prevail on its
challenges to the Army’s evaluation of F3EA’s and Lukos’
proposals. Thus, we must evaluate whether Oak Grove
would have had a substantial chance of receiving the con-
tract in a scenario in which Oak Grove has succeeded in
proving that neither F3EA nor Lukos submitted compliant,
awardable proposals.
From this perspective, we find no clear error in the
Court of Federal Claims’ finding that, in that eventuality,
Oak Grove is an interested party and would have had a
substantial chance of being awarded the SOF RAPTOR IV
contract. If F3EA and Lukos were eliminated, as Oak
Grove alleges they should have been, the Army would have
been obligated to seek and consider revised proposals from
other offerors that were initially deemed unawardable, in-
cluding Oak Grove. See Tinton Falls Lodging Realty, LLC
v. United States, 800 F.3d 1353, 1359 (Fed. Cir. 2015) (“[A]
bid protester had a ‘substantial chance’ of receiving a con-
tract – and therefore standing to challenge the award of
that contract – if, as a result of a successful bid protest, the
government would be obligated to rebid the contract and
the protester could compete for the contract during the
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OAK GROVE TECHNOLOGIES, LLC v. US 15
reopened bid.”). Assuming, as we must, that its challenges
to F3EA and Lukos would be successful, Oak Grove would
be provided an opportunity to submit a revised proposal,
giving it a chance to cure the deficiencies in its original “un-
awardable” proposal and, hence, would have a “substantial
chance” of being awarded the contract.
Accordingly, the trial court’s finding that Oak Grove
demonstrated a substantial chance of being awarded the
contract – and, for purposes of the standing analysis, was
an interested party and prejudiced – is not clearly errone-
ous. See J.A. 13. Thus, Oak Grove had standing to chal-
lenge the awardability of F3EA and Lukos. We affirm the
Court of Federal Claims’ denial of the government’s motion
to dismiss for lack of standing.
B
Having disposed of the procedural issues raised by the
parties, we now turn to their substantive arguments.
F3EA and the government contend that the Army did not
act arbitrarily and capriciously in finding F3EA’s proposal
acceptable. Specifically, F3EA and the government argue
that (1) Oak Grove waived its argument that the agency
was required to hold discussions and, in any case, discus-
sions were not required, (2) F3EA was not required to in-
clude a teaming agreement in its proposal, and (3) the
agency’s investigation into RM’s alleged misconduct was
adequate. F3EA and the government additionally argue
that the trial court erred by finding Lukos’ proposal unac-
ceptable. We agree with F3EA and the government on each
of these points.
1
First, we address F3EA’s and the government’s argu-
ment that the Army did not act arbitrarily and capriciously
in awarding the contract to F3EA without first engaging in
discussions with offerors. On de novo review, we conclude
Oak Grove waived this issue, consistent with our holding
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16 OAK GROVE TECHNOLOGIES, LLC v. US
in Blue & Gold, L.P. v. United States, 492 F.3d 1308, 1313
(Fed. Cir. 2007).
In Blue & Gold, 492 F.3d at 1313, we held that “a party who has the opportunity to object to the terms of a govern- ment solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action in the Court of Federal Claims.” The applicability of the “Blue & Gold rule” turns on the existence of a patent error. “A defect in a solicitation is patent if it is an obvious omission, inconsistency, or discrepancy of significance. Ad- ditionally, a defect is patent if it could have been discovered by reasonable and customary care.” Inserso Corp. v. United States,961 F.3d 1343, 1349
(Fed. Cir. 2020) (inter-
nal citation omitted). Thus, the issue we confront is
whether the error alleged by Oak Grove is obvious or could
at least have been discovered by reasonable and customary
care.
Oak Grove asserts that the Army violated Defense Fed-
eral Acquisition Regulation Supplement (“DFARS”)
§ 215.306(c), which provides that “[f]or acquisitions with an
estimated value of $100 million or more, contracting offic-
ers should conduct discussions” (emphasis added). Regard-
less of the merits of this argument, the Army’s intent not
to conduct discussions – and, thus, the alleged violation of
the DFARS provision – is obvious from the Solicitation and
certainly could have been discovered by Oak Grove through
the exercise of reasonable and customary care. Indeed,
multiple portions of the Solicitation informed the bidders
that discussions would not be held, including the Solicita-
tion’s incorporation of FAR § 52.215-1 without its Alternate
I. J.A. 2777. Compare FAR § 52.215-1(f)(4) (“The Govern-
ment intends to evaluate proposals and award a contract
without discussions . . . .”), with FAR § 52.215-1, Alternate
I (f)(4) (“The Government intends to evaluate proposals
and award a contract after conducting discussions . . . .”)
(emphasis added). The Solicitation also expressly states
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OAK GROVE TECHNOLOGIES, LLC v. US 17
that “[t]he Government does not intend to hold discussions,
but reserves the right to do so, at the sole discretion of the
PCO [Procuring Contracting Officer].” J.A. 2777. Further,
“[o]fferors are cautioned that the award may not neces-
sarily be made to the lowest priced offeror and that award
may be made without discussions.” Id. Thus, Oak Grove’s
contention – that the Army’s decision not to hold discus-
sions violated DFARS § 215.306(c) – was obvious from the
Solicitation itself and had to have been raised before the
close of the bid process. As Oak Grove did not do so, this
issue is waived under the Blue & Gold rule.
In finding that the Blue & Gold waiver rule did not ap-
ply, the Court of Federal Claims relied on our decision in
Dell Federal Systems, L.P. v. United States, 906 F.3d 982(Fed. Cir. 2018). J.A. 35-36. Dell, however, considered the distinguishable circumstances in which the Army’s con- tracting officer conceded that the agency had “likely vio- lat[ed] . . . DFARS 215.306(c)(1)” and voluntarily took corrective action based on that determination.906 F.3d at 994
(internal quotation marks omitted). We were not
asked to, and did not, resolve the issue of whether a solici-
tation’s use of FAR 52.215-1 without Alternate I could trig-
ger a Blue & Gold waiver. In Dell, we did not decide
whether the contracting officer’s statement was the correct
interpretation of the regulation, and nothing about the gov-
ernment’s concession in that case binds us here. We disa-
gree with the trial court that Dell applies here.
Accordingly, by application of the Blue & Gold rule,
Oak Grove waived its argument relating to the Army’s fail-
ure to hold discussions.
2
We next address F3EA’s and the government’s argu-
ment that the Army did not act arbitrarily and capriciously
in finding F3EA’s proposal acceptable despite F3EA’s fail-
ure to include teaming agreements. The Court of Federal
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18 OAK GROVE TECHNOLOGIES, LLC v. US
Claims agreed with Oak Grove that the Army acted arbi-
trarily and capriciously. We do not.
The Solicitation provides that the “[o]fferor shall in-
clude in full all executed teaming arrangements, partner-
ships, joint venture ownership documentation, associate
contractor agreement contingencies, as applicable.”
J.A. 2775. The Solicitation further states that “any previ-
ous teaming arrangements . . . that [are] referenced within
the proposal shall be included as attachments in the admin
volume as supporting documentation.” Id. (emphasis
added). It also warned that failure to submit a complete
proposal including all required information could render an
offeror unacceptable and ineligible for award. J.A. 2762-
64. It is undisputed that F3EA’s proposal did not include
any written teaming arrangement, even though F3EA’s
proposal referenced a third party and discussed that
party’s capabilities and past performance. J.A. 24-26.
A proposal’s failure to conform to a term or condition of
a solicitation renders the proposal unawardable only if the
violation relates to a term or condition that is material. See
E.W. Bliss Co. v. United States, 77 F.3d 445, 448(Fed. Cir. 1996) (“[A] proposal that fails to conform to the material terms and conditions of the solicitation should be consid- ered unacceptable and a contract award based on such an unacceptable proposal violates the procurement statutes and regulations.”). A “defect or variation is immaterial when the effect on price, quantity, quality, or delivery is negligible when contrasted with the total cost or scope of the supplies or services being acquired.”48 C.F.R. § 14.405
. Whether a term or condition of a solicitation is a material requirement presents a question of law we review de novo. See Safeguard Base Operations, LLC v. United States,989 F.3d 1326, 1343-44
(Fed. Cir. 2021) (“We apply
de novo review to the Claims Court’s interpretation of the
Solicitation.”).
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OAK GROVE TECHNOLOGIES, LLC v. US 19
We conclude that the Solicitation’s teaming agreement
provisions are not material requirements. The non-mate-
riality of these provisions is reflected in Section L.7.7 of the
Solicitation, which provides that the “[o]fferor shall include
in full all executed teaming arrangements . . . as applica-
ble,” adding that “companies are not locked into any team-
ing arrangements or subcontractors.” J.A. 2775 (emphasis
added). It follows that teaming agreements are not always
required to be included, as they may be, for example, unex-
ecuted, inapplicable, or changing over time. Moreover, the
Solicitation directs the offerors to include teaming agree-
ments in the administrative volume, which is a portion of
the proposal that is not evaluated as part of the bid evalu-
ation process. See J.A. 2891 (agency confirming “[t]here is
no Section M [evaluation criteria] or evaluation for admin
volume.”). This seems to reflect the Army’s anticipation
that failing to show the agency any current teaming agree-
ments the offeror is party to would have a negligible impact
or effect on price, quantity, quality, or delivery.
By contrast, the Court of Federal Claims found the
teaming agreement requirement “serve[d] a substantive
and material purpose – ensuring that prime contractors
cannot simply claim the capability and experience of an-
other contractor for the purpose of making the offeror’s pro-
posal more competitive, absent some concrete evidence
that the described team will actually perform an awarded
contract.” J.A. 22 (emphasis added). We disagree. The So-
licitation was for an IDIQ contract and, as such, sought
proposals for a sample task, not an actual task that a win-
ning offeror was expected to perform. The then-current
teaming agreements, therefore, may not have any impact
on any task the successful offeror will be required to per-
form.
The Court of Federal Claims further faulted the Army
for failing to provide “any supporting rationale” regarding
its decision not to find F3EA’s bid non-compliant for the
lack of teaming agreements. J.A. 25. Given that the
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20 OAK GROVE TECHNOLOGIES, LLC v. US
Solicitation does not mandate exclusion from the bid pro-
cess of an offeror who fails to include teaming agreements,
the contracting officer was under no obligation to provide
written reasons for why he was not troubled by the lack of
inclusion of such agreements in F3EA’s proposal. See Dyn-
Corp Int’l, LLC v. United States, 10 F.4th 1300, 1313 (Fed.
Cir. 2021) (“Generally, contracting officers are not obli-
gated by the APA to provide written explanations for their
actions.”) (cleaned up).
Thus, we conclude that the Solicitation’s teaming
agreement provisions are not material requirements.
Therefore, F3EA’s offer did not become unawardable due
to F3EA’s failure to submit teaming agreements.
3
The Court of Federal Claims’ finding that the Army’s
internal investigation into RM’s conduct was inadequate is
clearly erroneous. It also appears to be the result of appli-
cation of an incorrect non-deferential standard of review.
“FAR provides a contracting officer with considerable
discretion to conduct fact-specific inquiries of acquisition
proposals to identify potential conflicts.” PAI Corp. v.
United States, 614 F.3d 1347, 1352-53(Fed. Cir. 2010). Moreover, we engage in a “strong presumption” that gov- ernment officials – including, here, RM, the chairperson of the SSEB – act consistent with their duties. Sanders v. U.S. Postal Serv.,801 F.2d 1328, 1331
(Fed. Cir. 1986).
The trial court failed to acknowledge these twin layers of
deference, and there is no indication that the court ac-
corded any deference to the agency’s investigative process.
Rather, the court appears to have substituted its own judg-
ment as to what constitutes an adequate investigation.
See, e.g., J.A. 40 (“[T]he Agency did not adequately investi-
gate possible violations . . . , including serious questions of
bias or improper conduct impacting the fairness and integ-
rity of this procurement.”). Instead of applying what
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OAK GROVE TECHNOLOGIES, LLC v. US 21
amounts to de novo review, deference should be given to
the decision making and discretion of the Army.
In particular, the Court of Federal Claims found that
the agency’s “failure to do more” – and especially its failure
to interview F3EA’s CEO and the two former-employee
whistleblowers – “was insufficient under the facts of this
case.” J.A. 43. Given the deference we accord to the
agency, we disagree. The Army’s contracting officer con-
ducted numerous interviews and examined written state-
ments from individuals involved in the STOs. All of them
confirmed that F3EA played no role in preparing the STOs,
directly contradicting the misconduct claims made in the
F3EA former employees’ emails. J.A. 2911-16. RM also
provided a sworn declaration denying Oak Grove’s allega-
tions. J.A. 2914-16. In light of these investigative steps,
and the evidence amassed, it was not unreasonable for the
Army’s contracting officer to choose not also to interview
RM and the former employees who sent the emails. We do
not say that these additional steps would have been in any
way inappropriate; we merely hold that it was a proper ex-
ercise of the agency’s discretion to decide they were unnec-
essary.
The trial court faulted RM for “play[ing] multiple roles
in the procurement.” J.A. 44. It focused on what it charac-
terized as RM “review[ing] his own work,” in that as the
contracting officer representative (“COR”) for the award of
the RAPTOR III contract he had been the author of some
of the past performance references, which in his later ca-
pacity as SSEB chairperson for the RAPTOR IV contract
he participated in evaluating as “outstanding,” J.A. 44.
The Court of Federal Claims viewed these as creating “cir-
cumstances [which] certainly warranted a more detailed
and thorough investigation” than the agency undertook.
J.A. 45. While we acknowledge that RM’s multiple roles
raise concerns, it remained within the agency’s discretion
to conduct the investigation – which, again, included
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22 OAK GROVE TECHNOLOGIES, LLC v. US
multiple interviews, sworn statements, and review and
generation of numerous documents – in the manner it did.
The Court of Federal Claims was further troubled by
“the Agency’s total obfuscation of [RM’s] role in this pro-
curement,” including the omission from the investigation
memoranda of the “critical detail” of RM’s role as the chair-
person of SSEB. J.A. 45-49. This finding is clearly errone-
ous. RM’s status as SSEB chairperson was noted in
documents that were produced to Oak Grove early in the
litigation. See, e.g., J.A. 2651 (showing RM signature with
title “SSEB Chairperson” in source selection plan docu-
ment), 2700 (showing source selection team structure).
Investigations are dynamic. A decision as to what ac-
tions to take next is often influenced by what has been
learned so far. Here, the contracting officer was permitted
to be informed by the fact that all direct witnesses to RM’s
actions denied any wrongdoing and to factor that evidence
into a decision not to pursue additional investigative steps.
The investigation undertaken was extensive, involving six
interviews, obtaining a sworn statement from RM, and pro-
ducing and gathering a voluminous record. While no doubt
a more thorough investigation would also have been justi-
fiable, the specific investigative steps to be taken are gen-
erally left to the discretion of the agency and not a
reviewing court.
Thus, nothing about the Army’s investigation into the
allegations relating to RM’s role render the agency’s deci-
sion to award the contract to F3EA arbitrary and capri-
cious.
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OAK GROVE TECHNOLOGIES, LLC v. US 23
4
We turn now to Oak Grove’s attacks on Lukos. 1 In or-
der to prevail on its bid-protest claims, Oak Grove must
demonstrate that it was actually prejudiced by the Army’s
actions, which here requires a showing that Lukos, as well
as F3EA, was not an awardable offeror. See generally Ban-
num, 404 F.3d at 1351 (explaining that, when considering
merits of protester’s claim, court must “determine, as a fac-
tual matter, if the bid protester was prejudiced by” the gov-
ernment’s conduct). Otherwise, Oak Grove cannot show it
had a substantial chance of being awarded the contract be-
cause Lukos, like F3EA, was more highly rated than Oak
Grove. 2
1 We disagree with F3EA’s contention that the Court
of Federal Claims violated the party presentation principle
by even considering whether Lukos was financially respon-
sible. The government made this issue relevant by point-
ing to Lukos as a highly-rated bidder that would have
blocked Oak Grove from receiving the SOF RAPTOR IV
contract even if F3EA were knocked out of the competition
by Oak Grove’s attacks. See J.A. 340-42 (Government’s ar-
guing in response to Oak Grove’s motion for judgment that
“Oak Grove was not ‘next in line’ for award”) (capitalization
altered).
2 Prejudice is an issue in connection with both
standing and the merits of a claim. In considering preju-
dice as part of evaluating whether a party has standing, we
must presume that “the party will, if permitted to proceed
with its claim, prevail on the merits.” REV, LLC, 91 F.4th
at 1164. The party is no longer accorded this presumption
at the merits stage, at which point a court must “review[]
evidence of prejudice on the merits.” Bannum, 404 F.3d at
1357. This distinction gives rise to the possibility that a
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24 OAK GROVE TECHNOLOGIES, LLC v. US
As with its challenges to the Army’s actual award of
the contract to F3EA, Oak Grove’s attempt to demonstrate
that Lukos was not a qualified offeror also fails. The Court
of Federal Claims found that Lukos could not have been
awarded the contract because it was not a financially re-
sponsible bidder. Specifically, the trial court found that
“the administrative record conclusively demonstrates that
Lukos, in fact, was ineligible for a contract award.” J.A. 27.
The court erred by making this factual determination in
the first instance. 3 Thus, the trial court’s conclusion that
the existence of the higher-rated Lukos offer could not have
defeated Oak Grove’s effort to prove prejudice on the merits
is clearly erroneous.
The administrative record does not “conclusively
demonstrate[]” anything about Lukos’ financial responsi-
bility or lack thereof. To the contrary, the administrative
record is, for valid reasons, incomplete. Because the con-
tract was awarded to F3EA, and not to Lukos, the contract-
ing officer never had any occasion to decide whether Lukos
was a financially responsible offeror. If it had ever become
necessary for the contracting officer to do so, and if the of-
ficer were to have found deficiencies in this regard, the of-
ficer would have been required to refer the matter to the
SBA, which would have worked with Lukos on potential
party will demonstrate prejudice for purposes of standing
but fail to do so on the merits.
3 In so holding, we do not deny that the record con-
tains indications that Lukos may not have been financially
responsible. See, e.g., J.A. 28 (noting DCAA report stating
Lukos was “found to be NOT financially capable of perform-
ing the contract”) (internal emphasis omitted); J.A. 29
(pointing to DCMA report stating Lukos is not found “to be
financially capable of supporting” the Solicitation) (inter-
nal emphasis omitted).
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OAK GROVE TECHNOLOGIES, LLC v. US 25
fixes to the issues. See FAR § 9.105-2(a)(2) (“If the con-
tracting officer determines that a responsive small busi-
ness lacks certain elements of responsibility, the
contracting officer shall comply with the procedures [re-
quiring referral to SBA].”); FAR § 19.602-1(a) (“Upon de-
termining and documenting that an apparent successful
small business offeror lacks certain elements of responsi-
bility . . . , the contracting officer shall . . . [r]efer the mat-
ter to the cognizant SBA [barring other conditions].”). For
these reasons, had an assessment of Lukos’ financial re-
sponsibility been necessary to the Court of Federal Claims’
decision, it should have remanded the issue for further
agency review rather than attempt to resolve the issue it-
self on an incomplete record. See CACI, 67 F.4th at 1154
(“Typically, . . . if the issue has not been addressed in the
first instance by the contracting officer, a remand is neces-
sary for the contracting officer to address the issue of prej-
udice.”).
Accordingly, the Court of Federal Claims erred in find-
ing that Lukos was ineligible to win the contract due to its
lack of financial responsibility and in concluding that Lu-
kos’ bid did not defeat Oak Grove’s effort to satisfy the prej-
udice component of the merits of its claims.
5
In sum, we hold that (1) Oak Grove waived its argu-
ment that the Army was required to hold discussions, (2)
F3EA was not required to include teaming agreements in
its proposal, and (3) the quality of the agency’s investiga-
tion into RM did not render its contract award decision ar-
bitrary and capricious. We further hold that the Court of
Federal Claims’ finding that Lukos’ offer could not defeat
Oak Grove’s showing of prejudice was clearly erroneous.
Because the trial court’s now-vacated findings on each of
these points were the bases of its conclusion that the
Army’s award of the SOF RAPTOR IV contract to F3EA
was arbitrary and capricious, and that Oak Grove was
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26 OAK GROVE TECHNOLOGIES, LLC v. US
prejudiced, its entry of an injunction was an abuse of dis-
cretion. Hence, we vacate the order enjoining the Army
from proceeding with its award to F3EA. See PGBA, 389
F.3d at 1223 (“We give deference to the Court of Federal
Claims’ decision to grant or deny injunctive relief, only dis-
turbing the court’s decision if it abused its discretion.”).
Oak Grove raised additional challenges to the accepta-
bility of F3EA’s and Lukos’ bids, relating generally to al-
leged failures to submit certain documents or to meet
budget requirements, that the Court of Federal Claims did
not need to reach. See e.g., J.A. 222-23, 246-47, 262-66,
533-34, 591, 608. On remand, the trial court will need to
determine if it must resolve these (and any other) issues. 4
C
Finally, we address the government’s appeal of the
Court of Federal Claims’ imposition of sanctions for discov-
ery violations. Our review is for abuse of discretion. See
1-10 Indus. Assocs. v. United States, 528 F.3d 859, 867(Fed. Cir. 2008). “A court abuses its discretion if the order imposing sanctions is based on an erroneous view of the law or on a clearly erroneous assessment of the evidence.”Id.
(internal quotation marks and citation omitted). There
was no such abuse here.
The Court of Federal Claims sanctioned the govern-
ment for failing to compile an adequate administrative
4 The parties advised us at oral argument of a second
action pending before the Court of Federal Claims, involv-
ing events occurring in the bidding process after the period
at issue in this appeal. See Oral Arg. at 52:8-18, 52:30-
53:06 (available at https://oralargu-
ments.cafc.uscourts.gov/default.aspx?fl=22-1556_0306202
4.mp3). The impact, if any, of our decision today on the
second action is a matter left to the Court of Federal
Claims.
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OAK GROVE TECHNOLOGIES, LLC v. US 27
record and, thus, wasting judicial resources. Specifically,
the trial court faulted the government for omitting two doc-
uments from the administrative record: a DCMA report re-
garding Lukos’ financial responsibility and a letter
documenting the agency’s removal of SSEB chairperson
RM from his role in the procurement process. The court
explained:
The Agency’s failure to include the omitted
documents was neither reasonable nor excus-
able – it was, rather, an improper compila-
tion, submission, and certification of the
administrative record. The omissions delayed
resolving this case, wasted the Court’s judi-
cial resources by forcing the Court to engage
in fact finding on an incomplete record, and
imposed substantial costs on Oak Grove.
J.A. 80. These findings, including that the two omitted
documents should have been included in the administra-
tive record, are not clearly erroneous.
Appendix C, ¶ 21 of the Rules of the Court of Federal
Claims requires the government to “identify and provide
(or make available for inspection) the administrative rec-
ord in a protest case.” This rule arises from the fact that
“to perform an effective review,” the Court of Federal
Claims relies on the government to compile “a record con-
taining the information upon which the agency relied when
it made its decision as well as any documentation revealing
the agency’s decision-making process.” Vanguard Recovery
Assistance v. United States, 99 Fed. Cl. 81, 92(2011). “The court’s review function is undermined when an agency as- sembles a record that consists solely of materials that in- sulate portions of its decision from scrutiny or that it deems relevant to specific allegations raised by a protester.” Joint Venture Comint Sys. Corp. v. United States,100 Fed. Cl. 159, 168
(2011).
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28 OAK GROVE TECHNOLOGIES, LLC v. US
As discussed above, the government injected into the
litigation the issue of whether Lukos’ offer was awardable,
and therefore a barrier to Oak Grove winning the contract.
Lukos’ financial responsibility, therefore, became pertinent
to whether Lukos could be awarded the contract. Even
though we have ultimately decided that the Court of Fed-
eral Claims should not have attempted to determine finan-
cial responsibility itself, rather than remand to the Army
for SBA to make such a determination, documents related
to the issue were relevant to the court’s review of the bid
protest, due to the government’s introduction of the Lukos
issue. Thus, it was entirely appropriate for the Court of
Federal Claims to find that the DCMA report should have
been included by the government in the administrative rec-
ord.
Likewise, the government knew at the time it prepared
the administrative record that Oak Grove was contending
that F3EA should not have received the contract due to a
conflict grounded in the allegedly improper conduct of the
SSEB chairperson, RM. RM’s termination from the role of
SSEB chairperson occurred in April 2020, see J.A. 3950-51,
within the period of activity under attack by Oak Grove,
which was January through May 2020. See, e.g., J.A. 1623
(government’s Notice of Corrective Action dated January
31, 2020); J.A. 2907 (contracting officer’s memorandum re-
garding PIA and OCI allegations dated February 18, 2020);
J.A. 3439 (contracting officer’s summary memorandum re-
garding PIA and OCI allegations dated May 1, 2020).
Given the centrality of Oak Grove’s allegations against RM
to the awardability of F3EA’s offer, the RM termination let-
ter – even if, as the government contends, it provides rea-
sons unrelated to those raised by Oak Grove – should have
been included in the administrative record.
The government failed, however, to produce the DCMA
report on Lukos’ financial responsibility and the RM termi-
nation letter until after merits briefing was completed and
oral argument had been heard. J.A. 48 (“[RM termination]
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OAK GROVE TECHNOLOGIES, LLC v. US 29
letter was not included in the administrative record until
after all of the briefing, oral argument, and status confer-
ences were concluded.”); J.A. 64 (“Agency failed to include
the DCMA report in the record until after both the comple-
tion of the merits briefing and oral argument.”) (internal
emphasis omitted). The government’s “omissions delayed
resolving this case, wasted the Court’s judicial resources by
forcing the Court to engage in fact finding on an incomplete
record, and imposed substantial costs on Oak Grove.”
J.A. 80. The Court of Federal Claims did not abuse its dis-
cretion in determining that the government’s conduct was
not “objectively reasonable” and, therefore, violated Court
of Federal Claims Rule 11. 5
Nor are we persuaded by the government’s suggestion
that Rule 11 prohibits a trial court from acting on its own
initiative to order payment of a monetary penalty to an op-
posing party. See Gov’t Br. at 63 n.19. The government
cites no binding authority to support this proposition,
pointing only to a single opinion of the Court of Appeals for
the Tenth Circuit. See Hutchinson v. Pfeil, 208 F.3d 1180,
1184 (10th Cir. 2000). While we respect the view of our
sister circuit, we have not adopted this limitation on trial
courts’ discretion ourselves. Moreover, the Rules of the
Court of Federal Claims expressly contemplate that “[t]he
court must not impose a monetary sanction[] on its own,
unless it issued the show cause order . . . .” RCFC 11(c)(5)
(emphasis added). The trial court in this case issued such
an order before imposing the monetary sanction. See
J.A. 52 (“[P]ursuant to RCFC 11 and this Court’s inherent
5 Although the parties had, in the trial court, dis-
puted the applicable legal standard for imposition of sanc-
tions, on appeal they are in agreement that the
government’s conduct should be assessed for “objective rea-
sonableness.” See, e.g., Oak Grove Br. at 59; Gov. Reply Br.
at 27-28.
Case: 22-1556 Document: 117 Page: 30 Filed: 09/16/2024
30 OAK GROVE TECHNOLOGIES, LLC v. US
authority, the Court orders the government to show cause
why monetary sanctions should not be imposed against De-
fendant for its piecemeal and improper handling of the ad-
ministrative record in this matter.”). We see no basis to
deem this rule, which was indisputably followed, invalid.
Accordingly, we affirm the trial court’s imposition of
sanctions.
IV
Because we find that (1) Oak Grove waived its argu-
ment that the Army was required to hold discussions, (2)
F3EA was not required to include a teaming agreement in
its proposal, and (3) the Army’s investigation into RM’s al-
leged misconduct did not render its contract award arbi-
trary and capricious, Oak Grove has failed to prove that the
award of the SOF RAPTOR IV contract to F3EA was arbi-
trary and capricious. The Court of Federal Claims’ finding
that another bidder, Lukos, was financially irresponsible
and, hence, ineligible to win the contract, is also clearly er-
roneous. Therefore, the judgment and the injunction or-
dered by the Court of Federal Claims are vacated. The
imposition of discovery sanctions on the government is af-
firmed. The case is remanded to the Court of Federal
Claims for further proceedings not inconsistent with this
Opinion.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED
COSTS
No costs.
Reference
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