Almost irrefragable?

Pop quiz: do you have any idea of what the word "irrefragable" means? What about the phrase "almost irrefragable"? How about "well-nigh irrefragable"?[1]

I assure you that irrefragable is a real word (even though my spell check doesn't think so), but as far as I can tell, it only really comes up in one context and it's one that is particularly annoying whenever it happens. Before you google it,[2] though, let's take a little fact-pattern walk together down bid-protest lane, shall we?[3]

IXI is a small business that "specializes in the development of naval tactical data systems technology for use by military customers and defense contractors worldwide, including the manufacture of a counter-UAS device." I don't pretend to know what that means exactly, but the gist is that IXI does fancy stuff with data and drones.

More specifically, though, because of IXI's speciality, when the Navy issued a broad agency announcement under the  Small Business Technology Transfer program for the topic of "Airborne Radar-Based Detection and Discrimination of Small Unmanned Aerial Systems and Birds for Collision Avoidance and Force Protection",[4] IXI put in a proposal.

Apparently, the ARBDDSUASBCAFPT [5] was a hot topic because 17 other companies also put in proposals. Although the Navy picked two awards under the ARBDDSUASBCAFPT, alas IXI was not selected.

That's when things get kinda hinky.

You see, when IXI filed a protest in the Court of Federal Claims, it noticed something weird. Specifically, it seemed like the government never reviewed a part of IXI's proposal and, oddly, could not even produce a copy of that part of the proposal. Strange, right? IXI sure thought so.

And after some back and forth with the government about whether the administrative record was actually complete or not, and after a critical employee who supposedly had the relevant documents went on vacation, the government informed IXI that it was going to take corrective action.

Now, the savvy reader will note that I'm writing about IXI, so you can presume that IXI didn't exactly like the proposed corrective action. Any guesses on what happens next?

Based upon the allegations raised by IXI, review of the BAA/Navy Instructions and official contract file, and discussions with all stakeholders, it is my independent assessment and recommendation that corrective action be taken to review the solicitation, reexamine the technology, and take any action deemed appropriate by the agency, which may include a reevaluation of proposals or cancellation of the STTR Topic

Oh no! Cancellation?! Yes, dear reader, a few days later, the CO canceled the topic. No awards for anyone. Everyone loses, including IXI. So long ARBDDSUASBCAFPT, it was fun while it lasted. But why cancel ARBDDSUASBCAFPT? Here's what the Program Officer wrote:

At the time the topic was written (June 2020), PMA-262 was pursuing the development of an organic radar-based sense and avoid capability for non-cooperative aircraft collision avoidance. This same radar would have been the transition focus of this Small Business Technology Transfer (STTR) project addressing small Unmanned Aircraft Systems (sUAS) and bird Detection.

However, PMA-262 recently canceled this radar development, believing that a radar, such as this, is not necessary to operate safely in national and international airspace. A combination of cooperative sensor systems, certificates of authorization, due regard alternate means of compliance and strategic avoidance has been deemed sufficient to provide safe operation. The inclusion of a radar-based collision avoidance system was assessed to not appreciably increase overall safety. Furthermore, the safety threat from sUAS and birds was not sufficient to warrant a radar system in the absence of an existing suitable one.

Huh. No need for the radar, no need for the topic. No threat from the birds, no need to Avoid Collisions and, uh, Protect Forces. Makes sense.

One really bad fact for the Navy, though, is that, while the cancellation decision refers to an underlying choice to cancel the radar development, that underlying choice happened before awards were made. It's sort of weird to imagine, in the absence of a protest, the government making an award for something, realizing the next day that "oops I guess we didn't need that thing when we made that award?", and then just Homering into the bushes and pretending like it never made the award in the first place? Post-protest cancellations do happen, but typically the government doesn't rely on facts that should have been known pre-protest.

And yet, cancellations, as much as they stink, are pretty hard to protest. As the GAO puts it:

In a negotiated procurement, such as this one, an agency has broad authority to decide whether to cancel a solicitation, and to do so, need only establish a reasonable basis. A reasonable basis to cancel exists when an agency determines that a solicitation does not accurately reflect its needs. For example, cancellation of a procurement is reasonable when the agency determines that it no longer has a requirement for the item solicited, or when the agency discovers an existing contract for its requirement would be more advantageous to the government than continuing with the procurement. Moreover, an agency may properly cancel a solicitation regardless of when the information precipitating the cancellation first surfaces or should have been known. This is so even when the cancellation occurs during the pendency of a protest.

Ouch. Let's do the lawyer-ellipses dance, shall we? "[C]ancellation of a procurement is reasonable when the agency determines that it no longer has a requirement for the item solicited... even when the cancellation occurs during the pendency of a protest". Feels pretty much like a slam dunk for the government.

But hold on? Just last month I read an interesting article that suggested that the Court of Federal Claims (COFC) is particularly receptive to cancellation claims. Here's what the author wrote:

Historically, protesters have not had much success challenging cancellation decisions. The GAO and COFC generally have concluded that the relevant regulations provide a great degree of discretion to the agency to cancel a solicitation.

In a pair of recent decisions, however, two different COFC judges adopted a different interpretation of the regulations and applied a higher degree of scrutiny to the agency’s decision to cancel the solicitations at issue. These decisions highlight an emerging split between the COFC and GAO on an important issue that is increasingly relevant for contractors and agencies.

Just last year, the COFC had made it clear that agencies can't just cancel solicitations willy-nilly or with pretext. And IXI made a pretty strong argument that "the sudden change in position by the Navy immediately after IXI exposed a fatal flaw in the agency’s evaluation leads to only one logical conclusion: that the Navy cancelled this procurement to end this litigation."

Is there hope? Did IXI win?

No. They lost.

Here's what the Court said:

The fact that IXI was informed that the solicitation had been cancelled five days after IXI filed its first amended complaint does not, in and of itself, satisfy IXI’s burden of demonstrating by a preponderance of the evidence that the agency’s decision was arbitrary and capricious. Rather, IXI must demonstrate that the Navy’s decision to cancel the solicitation lacked a rational basis, which it has not done in this case. The record demonstrates that the Navy had a rational basis for cancelling the topic after having determined that it did not need to continue pursuing the SAA radar technology.

Sad trombone for IXI.

And yet, there's a weird thing about the case that I keep thinking about. I mentioned at the beginning of this post that there's this word "irrefragable". Here's how it can come up:

To assert a claim of bad faith, a bidder must overcome the presumption of good faith attributed to the government with proof that is “almost irrefragable.” “Almost irrefragable proof amounts to clear and convincing evidence.” Further, “[i]n the cases where the court has considered allegations of bad faith, the necessary irrefragable proof has been equated with evidence of some specific intent to injure the plaintiff.”

In other words, "almost irrefragable proof" of bad faith is basically "clear and convincing evidence" that the government meant to screw over the protestor. It's a different claim for a "no-rational-basis" claim, and is objectively harder to prove.

And, in this case, IXI decided it didn't have the goods to make that claim. The court seemed to think this made a lot of sense:

While the distinction is subtle, there is a difference between claiming on the one hand that the government’s stated reason for cancelling the solicitation was pretextual and that the government was motivated by bad faith and a desire to injure the plaintiff and claiming—as IXI does here—that there was no rational basis for the government’s decision to cancel the solicitation and that the government was instead motivated by a desire to avoid litigation.

Ok fine. But hear me out. Is that distinction actually all that meaningful? If an agency cancels a solicitation because it wants to avoid litigation (which is what you'd have to argue in a no-rational-basis claim) isn't that ... just... a pretext?

That's what the GAO said yesterday in a different bid-protest case with a similar outcome for the protestor:

Where, as here, a protester argues that the agency’s rationale for cancellation is but a pretext--that the agency’s actual motivation is to avoid awarding a contract on a competitive basis or to avoid resolving a protest--we will closely examine the reasonableness of the agency’s actions in canceling the acquisition. Even so, the reasonableness standard applicable to cancellation of a solicitation remains unchanged. If an agency’s cancellation decision is reasonably supported by a change in the agency’s requirements, the fact that the decision to cancel may also have been motivated by another inappropriate interest provides no basis to sustain a protest of the cancellation.... If we were to assume that the agency’s decision to cancel the solicitation was, in part, pretextual, our decisions have consistently concluded that an agency may nevertheless still cancel a solicitation if it has established a reasonable basis for doing so.

That certainly makes more logical sense to me than the COFC's posture.

In any event, I hope it's almost irrefragable to someone how this area of bid-protest law will shake out. Are the GAO and COFC actually that far apart? Are we already back to a world in which any reasonable basis for cancellation will survive protest?

I guess we'll see. Definitely not legal advice but, in the meantime, my intuition tells me that the recent COFC decisions sustaining cancellation claims were just ... blips... on the radar screen.

[1] Perhaps you're of a certain age, dear reader, and you are channeling your inner Inigo Montoya and muttering to yourself "You keep using that word. I do not think it means what you think it means." If so, pass go and collect $200.

[2] Or, I guess, now it's ok if you Bing it? It's complicated.

[3] Today's fact pattern comes from the recent Court of Federal Claims decision in IXI Technology Electronic Warfare, LLC (“IXI”) v. United States.

[4] I dunno. I sorta love that the Navy needs research on this sort of thing. I also want to believe that someone in the approval chain looked at this topic and mentally labeled it the "Is it a bird? Is it a plane?" topic. I know I would.

[5] No, they didn't. But yes, I just did.

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