Treadwell Corporation v. United States
133 Fed. Cl. 371
| Fed. Cl. | 2017Background
- Navy issued RFP for Low Pressure Electrolyzer (LPE) systems for submarines (IDIQ, lowest-priced technically acceptable). Proposals were evaluated on Technical Capability, Corporate Experience, and Past Performance.
- Treadwell and Hamilton were the only offerors ultimately found technically acceptable; Hamilton submitted the lowest-priced technically acceptable bid and received the award on July 13, 2016.
- RFP delivery terms required first-article testing and contemplated that production/delivery of simulators and production units would follow first-article approval; FAR 52.209-3 and FAR 9.305 were incorporated and warned that production prior to approval is at contractor’s risk.
- After award, the Navy issued Delivery Order 0001 and later (Nov. 2, 2016) modified the delivery schedule to extend deadlines and clarify that production-unit delivery would occur 12 months after first-article approval.
- Treadwell sued in the Court of Federal Claims seeking a preliminary injunction and stay of Hamilton’s performance, asserting multiple procurement defects (nonresponsiveness/technical acceptance, unequal treatment, improper post-award modification/cardinal change, unlawful award-with-intent-to-modify, failure of meaningful discussions).
- The court found the administrative record sufficient, declined to supplement it with certain post hoc documents proffered by Treadwell, and denied the preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hamilton's proposal was nonresponsive / not technically acceptable because it did not commit to the strictest simultaneous delivery timeline | Treadwell: Hamilton failed to show it could meet the most aggressive 15-month simultaneous delivery schedule required by solicitation and thus was nonresponsive | Gov/Hamilton: RFP did not require simultaneous delivery; delivery orders and first-article approval timing were discretionary; Hamilton agreed to solicitation terms and committed to 15-month qualification | Court: RFP did not require simultaneous delivery; Hamilton’s proposal was responsive and technically acceptable |
| Whether Navy treated offerors unequally on delivery-schedule evaluation | Treadwell: Navy relaxed schedule requirements for Hamilton while holding Treadwell to a stricter timeline | Gov/Hamilton: Both offers were evaluated per RFP criteria; Treadwell’s proposed aggressive schedule exceeded RFP requirements and raised no evaluative issue | Court: No unequal treatment shown; record shows equal evaluation consistent with RFP |
| Whether post-award modification to delivery schedule was a cardinal change (outside scope) or award-with-intent-to-modify | Treadwell: Modification materially altered scope and showed intent to modify after award (violating procurement rules) | Gov/Hamilton: Modification clarified delivery timing within scope (RFP left issuance timing to government); FAR clauses and RFP contemplated sequencing; no recompetition required | Court: Modification fell within original procurement scope (not a cardinal change); no evidence of bad faith intent to award with intent to modify |
| Whether preliminary injunctive relief (stay of performance) was warranted | Treadwell: Without a stay it will suffer irreparable harm and likely would have been awarded but for alleged errors | Gov/Hamilton: Treadwell delayed bringing action; Hamilton performance underway; public interest and Navy readiness weigh against a stay; record undermines plaintiff’s likelihood of success | Court: Treadwell failed to show irreparable harm and is unlikely to succeed on merits; injunction denied |
Key Cases Cited
- Banknote Corp. of Am. v. United States, 365 F.3d 1345 (Fed. Cir.) (establishes standards for overturning procurement decisions under APA)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S.) (agency action arbitrary and capricious where important aspects ignored or explanation runs counter to evidence)
- Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (U.S.) (presumption of regularity in agency decisions and focus on administrative record)
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed. Cir.) (limits on supplementing the administrative record)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir.) (four-factor test for preliminary injunctions in bid protests)
- AT&T Communications v. Wiltel, Inc., 1 F.3d 1201 (Fed. Cir.) (analysis of cardinal change and scope of original procurement)