Limco Airepair, Inc. v. United States
130 Fed. Cl. 544
| Fed. Cl. | 2017Background
- The Air Force issued a full-and-open solicitation (Lowest Price Technically Acceptable) for remanufacture of F-16 heat exchangers after cancelling a prior small-business set-aside; two offers were received: WCC ($12,974.21/unit) and Limco ($13,500/unit).
- Solicitation required price proposals to be evaluated for reasonableness, price realism, and allowed the agency to use FAR 15.404 techniques (including comparison of proposed prices).
- The Contracting Officer/Source Selection Authority documented price analysis in a Proposal Analysis Report (PAR) and Source Selection Decision Document (SSDD), concluding both offers were technically acceptable and prices were "fair and reasonable and balanced based upon competition."
- Limco protested, alleging (1) the Air Force failed to perform a proper price realism analysis of WCC’s price and (2) the Air Force engaged in ex parte communications with WCC regarding performance testing that created an unequal playing field.
- The court reviewed the administrative record under the arbitrary-and-capricious standard and Rule 52.1; the Air Force defended that it used authorized FAR techniques (price comparison and adequate competition) and that any ex parte contact caused no prejudice to Limco.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the agency fail to perform a price realism analysis as required by the solicitation? | Limco: Agency did not adequately analyze WCC’s reduced price or realism risk. | Gov/WCC: Agency used FAR 15.404 techniques (price comparison/adequate competition) and documented the analysis in PAR/SSDD. | Court: Agency conducted an adequate, documented price realism analysis under the Solicitation and FAR; claim denied. |
| Did ex parte communication with WCC prejudice Limco / create an unequal playing field? | Limco: Air Force told WCC performance testing was not required, which Limco learned only later and might have affected its pricing. | Gov/WCC: Even if communication occurred, Limco fails to show it was prejudiced or would have had a substantial chance to win. | Court: Limco failed to show prejudice or that it had a substantial chance to prevail absent the contact; claim denied. |
| Is injunctive relief appropriate? | Limco: Sought injunctive/declaratory relief and remand to require price realism analysis and equal disclosure about performance testing. | Gov/WCC: Limco cannot show success on merits or irreparable harm; injunctive relief unwarranted. | Court: Denied injunctive relief because Limco failed on the merits and showed no prejudice. |
| Was the agency required to adopt a particular price-realism methodology or further inquiry into WCC’s price reduction? | Limco: Court should require further agency analysis or different methodology. | Gov/WCC: Agency discretion governs method unless solicitation commits agency to a specific methodology. | Court: Agency discretion respected; court will not substitute its judgment about methodology. |
Key Cases Cited
- Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345 (Fed. Cir.) (standards for challenging procurement decisions).
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir.) (contracting officers need not provide exhaustive written explanations).
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious review; agency must consider important aspects of problem).
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir.) (prejudice standard in bid protests — losing offeror must show a substantial chance to prevail absent the error).
- Honeywell, Inc. v. United States, 870 F.2d 644 (Fed. Cir.) (deference to agency procurement decisions where reasonable basis exists).
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed. Cir.) (judicial review focuses on the administrative record).