71.

Protest of Contract Awards

It is well settled that, when the government encourages a bidder to submit a bid upon a prospective government contract, there is an implied condition that the government will honestly consider that bid. Continental Business Enterprises, Inc. v. United States, 452 F.2d 1016, 1019 (Ct. Cl. 1971); Keco Industries, Inc. v. United States, 428 F.2d 1233, 1236 (Ct. Cl. 1970) (Keco I). The bidder has the option of pursuing either of two judicial avenues when a breach occurs. First, if relief is sought before the contract is awarded, the bidder may seek injunctive relief under 28 U.S.C. § 1491(a)(3) in the Court of Federal Claims. La Strada Inn, Inc. v. United States, 12 Cl. Ct. 110, 113 (1987). Second, if relief is sought after the contract is awarded, the bidder may seek injunctive relief in the district court. Scanwell Laboratories, Inc. v. Schaffer, 424 F.2d 859 (D.C. Cir. 1970). To establish that the government breached its implied duty to treat all bids fairly and honestly, a plaintiff must show that the government's actions were arbitrary and capricious. Keco Industries, Inc. v. United States, 492 F.2d 1200 (Ct. Cl. 1974) (Keco II); Crux Computer v. United States, 24 Cl. Ct. 223, 225 (1991). This is a particularly difficult standard to meet because there is a strong presumption that government officials act properly and in good faith. Kalvar Corp. v. United States; 543 F.2d 1298 (Ct. Cl. 1976), cert. denied, 434 U.S. 830 (1977); Eagle Construction Corp. v. United States, 4 Cl. Ct. 470, 479 (1984). Judicial review of the government's action in bid protest cases is not a de novo proceeding; rather, the scope of review is limited to the administrative record. The proper standard of review is whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law based on the administrative record. See, e.g., Prineville Sawmill Co., Inc. v. United States, 859 F.2d 905, 909 (Fed. Cir. 1988); Scanwell Laboratories v. Schaffer, 424 F.2d 859 (D.C. Cir. 1970). In such circumstances, a court should not substitute its judgment for that of the agency. Magnavox Electronic Systems Co. v. United States, 26 Cl. Ct. 1373, 1380 (1992), citing Motor Vehicle Manufacturers Assoc. of U.S. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983); RADVA Corp. v. United States, 17 Cl. Ct. 812, 818 (1989), aff'd, 914 F.2d 271 (Fed. Cir. 1990). This limited scope of review is in accord with the fundamental principle that judicial review of discretionary agency action is not de novo, but is limited to review of the administrative record. Florida Power & Light v. Lorion, 470 U.S. 729, 743 (1985); Camp v. Pitts, 411 U.S. 138, 142 (1973); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971). That record consists of the materials and files that were before the agency at the time the decision was made, not materials adduced through discovery by opponents of the agency's action or de novo proceedings in the court. Florida Power & Light, 470 U.S. at 743; Camp v. Pitts, 411 U.S. at 142; Overton Park, 401 U.S. at 420. The only exceptions to this principle apply in the unusual case in which a court determines that the administrative record presented by the agency does not provide an adequate basis for judicial review. Camp v. Pitts, 411 U.S. at 143; Overton Park, 401 U.S. at 420. However, even in such a case, the remedy is to obtain from the agency, either through affidavits or testimony, such additional explanations of the reasons for the agency decision as may prove necessary, Camp v. Pitts, 411 U.S. at 142-43, or to remand to the agency for amplification. Courts routinely grant protective orders in record review cases precluding the taking of discovery. Saratoga Development Corp. v. United States, 21 F.3d 445, 457 (D.C. Cir. 1994). The government may not be compelled to perform a contract specifically. Malone v. Bowdoin, 369 U.S. 643 (1962); Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 696-705 (1949); Sharp v. Weinberger, 798 F.2d 1521 (D.C. Cir. 1986). Consistent with this doctrine, the authority to grant injunctive relief to a disappointed bidder upon a government contract does not include authority to order the government to award a contract to the particular bidder. Scanwell Laboratories v. Schaeffer, 424 F.2d at 864; see Parcel 49C Ltd. Partnership v. United States, 31 F.3d 1147, 1153-54 (Fed. Cir. 1994) (government enjoined from canceling a solicitation for an improper reason). If the implied duty to consider a bid fairly is breached, in addition to seeking injunctive relief, a bidder may seek damages because the claimant was put to needless expenses in preparing its bid. Heyer Products Co. v. United States, 135 Ct. Cl. 63, 69 (1956). In the district court, recovery of bid preparation costs would be limited to the $10,000 limit of the Little Tucker Act, 28 U.S.C. § 1346. [cited in USAM 4-4.420]