Starry Associates, Inc. v. United States
125 Fed. Cl. 613
Fed. Cl.2016Background
- HHS PSC issued an RFQ (Nov 2014) for UFMS support (set-aside; lowest-price technically acceptable). Starry was incumbent; Intellizant was low-priced and awarded after the SSA found it technically acceptable despite split TEP ratings.
- Starry protested at GAO (Dec 2014); HHS announced corrective action then said it would reevaluate; GAO dismissed as academic. HHS then reevaluated (Jan–Apr 2015) and again awarded to Intellizant; Starry filed another GAO protest.
- GAO sustained in part (Aug 11, 2015), finding evaluation deficiencies and recommending reevaluation; GAO found bias allegations "without merit."
- In Sep 2015 HHS canceled the solicitation, explaining two proprietary systems (MACCS, GovNet-NG) were covered by separate Starry license/support agreements and would be separated from the UFMS procurement; Starry alleged cancelation was a pretext to benefit Intellizant and prompted a third GAO protest, which denied relief.
- Starry sued in the Court of Federal Claims and sought leave to take four depositions (CO Cassandra Ellis; John Davis, Accounting Services Division Manager; Patrick Joy; and a TEP member) to supplement the administrative record, alleging bias and gaps in the record. HHS opposed but submitted two documents to add to the record.
- The court found credible evidence suggesting Davis’s alleged bias and continued involvement (despite a claimed recusal), and that depositions likely would produce evidence overcoming the presumption of regularity; it granted limited discovery (the four depositions) and accepted HHS’s two proffered documents into the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether supplemental discovery (depositions) is warranted to investigate alleged bias and fill gaps in the AR | Depositions of the CO, Davis, Joy, and a TEP member are necessary because the contemporaneous record is incomplete and post-hoc declarations are insufficient; credible allegations of bias exist | Discovery is unusual; the AR (with added declarations) is sufficient for review; if gaps exist, remand to agency is appropriate | Court granted leave for limited depositions, finding credible allegations of bias and that discovery likely would produce evidence overcoming presumption of regularity |
| Whether plaintiff made a credible threshold showing of agency bias/bad faith | Davis (former Intellizant employee) purportedly recused but influenced TEP composition, communications show ongoing involvement, and cancellation followed adverse GAO decision suggesting possible pretext | Agency maintains decisions were legitimate; GAO previously found bias allegations without merit; explanations (submitted post-hoc) justify cancellation | Court found plaintiff’s allegations credible: evidence suggested Davis’s involvement despite recusal and the cancellation could be pretextual |
| Whether supplementation should be limited to remand or direct discovery | Plaintiff contends remand would be inadequate given bias allegations—agency may not be candid if asked to re-document actions | Defendant urged remand rather than discovery and offered new declarations for the record | Court declined remand and permitted depositions, reasoning after-the-fact explanations were unlikely to suffice and defendant already had opportunity to supplement the AR |
| Whether defendant’s two proffered documents should be added to the AR | N/A (plaintiff sought depositions) | HHS asked to add an email explaining cancellation rationale and a CO declaration | Court admitted those two documents into the AR in addition to authorizing depositions |
Key Cases Cited
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed. Cir. 2009) (administrative record is primary source for judicial review; supplementation only when necessary)
- InfoReliance Corp. v. United States, 118 Fed. Cl. 744 (Fed. Cl. 2014) (extra-record evidence may be required for bad-faith allegations and to ensure effective review)
- Orion Int’l Techs. v. United States, 60 Fed. Cl. 338 (Fed. Cl. 2004) (recognizing need for extra-record evidence when bad faith is alleged)
- Beta Analytics Int’l v. United States, 61 Fed. Cl. 223 (Fed. Cl. 2004) (threshold for investigating bias; bad-faith evidence rarely appears in contemporaneous AR)
- L-3 Commc’ns Integrated Sys., L.P. v. United States, 91 Fed. Cl. 347 (Fed. Cl. 2010) (standard for when discovery/supplementation is permitted)
- Int’l Res. Recovery, Inc. v. United States, 61 Fed. Cl. 38 (Fed. Cl. 2004) (courts may consider extra-record evidence in bias/bad-faith inquiries)
- Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234 (Fed. Cir. 2002) (presumption that government officials act in good faith)
- Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324 (Fed. Cir. 2004) (clear-and-convincing standard required to overcome presumption of regularity)