Iap Worldwide Services, Inc. v. United States
21-1570
Fed. Cl.May 25, 2022Background
- IAP Worldwide challenged the Army’s award of a services contract to Vectrus, alleging the Army unlawfully declined to establish a competitive range and hold discussions in violation of DFARS 215.306.
- In an earlier opinion the Court held IAP prevailed on the merits of Count I, finding the Army’s source selection decision arbitrary and capricious for failing to properly apply DFARS 215.306.
- The Court deferred remedial relief pending supplemental briefing and factual declarations; parties took sharply divergent positions: IAP sought injunctive relief and bid/proposal costs, the government opposed any relief, and Vectrus proposed a limited remand without injunction.
- The dispute raised broader remedial questions about the Court’s equitable powers under 28 U.S.C. § 1491(b) and the distinctions among injunctive, declaratory, and remand relief.
- The Court concluded injunctive relief (vacatur or an order forcing discussions) was not warranted on the record, but that a stay and a limited remand to the Army (without vacatur) was appropriate; the Army must either amplify its contemporaneous rationale or issue a new decision, with deadlines for status filings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court should order injunctive relief (reopen procurement, require discussions) | IAP: Army must apply DFARS 215.306 correctly; an injunction requiring compliance and discussions is appropriate | Gov’t: Deny any relief; irreparable harm speculative; injunction would disrupt program and national-defense interests | Court: Denied injunctive relief now — plaintiffs succeeded on merits but failed to justify coercive relief; remand ordered instead |
| Whether remand without vacatur is appropriate and its scope | IAP: Seeks tailored injunction but accepts Army may develop new reasons; wants lawful application of DFARS 215.306 | Gov’t: Opposes remand as futile and disruptive; Vectrus: supports limited remand without injunction | Court: Ordered stay and limited remand; Army may (a) amplify contemporaneous rationale or (b) issue a new decision (either reopen discussions or reaffirm decision with new record); deadlines set |
| Whether IAP demonstrated prejudice (prejudicial error) warranting relief | IAP: Army’s failure to apply DFARS 215.306 created a greater-than-insignificant chance it would have been in competitive range and able to submit a final proposal revision | Gov’t: Error harmless; remand would be futile; no competitive advantage shown | Court: Found legal prejudice sufficient for remand (not enough for vacatur/injunction); refused to treat Army’s post-hoc rationale as dispositive per Regents |
| Whether bid and proposal costs should be awarded now | IAP: Requests bid/proposal costs in addition to equitable relief | Gov’t & Vectrus: Costs not warranted absent evidence proposals were wasted; outcome of remand controls | Court: Denied bid/proposal costs at this stage; left open if remand leads to reevaluation/new award that renders costs wasted |
Key Cases Cited
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir. 2004) (§1491(b) incorporates APA review standard but preserves trial court equitable discretion; injunctive relief not automatic)
- Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139 (U.S. 2010) (injunction is an extraordinary remedy that must be narrowly tailored)
- Dep’t of Homeland Sec. v. Regents of Univ. of Cal., 140 S. Ct. 1891 (U.S. 2020) (courts generally may not rely on post hoc rationalizations; agency must defend action on the reasons it gave when it acted)
- Florida Power & Light Co. v. Lorion, 470 U.S. 729 (U.S. 1985) (where record does not support agency action, remand for further explanation or investigation is the proper course except in rare circumstances)
- DynCorp Int’l, LLC v. United States, 10 F.4th 1300 (Fed. Cir. 2021) (approving remand in procurement context where agency can make new determinations on remand)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (recognizing remand as an available remedy in government procurement review)