the USDA improperly failed to suspend performance of the Meridian contract when it was notified of IRI's protest to the GAO. Under 31 U.S.C. § 3553(d)(1), absent exceptional circumstances, a federal agency must immediately suspend performance of a contract if the agency "receives notice of a protest under this section after the contract has been awarded but within 10 days of the date of the contract award . . . ."
In this case, the challenged contract was awarded to Meridian on July 14. On Friday, July 24, IRI filed its protest with the GAO and, virtually simultaneously, served a copy thereof on the USDA. The following Monday, July 27, GAO notified the USDA by telephone of IRI's protest, as required by 31 U.S.C. 3553(b)(1) ("Within one working day of receipt of a protest, the Comptroller General shall notify the Federal agency involved of the protest"); see also 4 C.F.R. § 21.3(a). The dispositive issue in this case is whether the "notice" referenced in 31 U.S.C. § 3553(d)(1) occurs when the agency receives actual notice of the protest through any means, or whether it occurs only when the agency receives the statutorily-prescribed notice from the GAO.
The Court concludes that the USDA's duty to suspend performance of the Meridian contract could be triggered only by notice from the GAO. This interpretation is compelled by the language and structure of the statute. The relevant provisions of 31 U.S.C. § 3553 are subsections (b), (c), and (d). Subsection (b) requires the Comptroller General to notify the agency within one working day of the filing of a protest. Subsection (c) involves protests seeking to prevent the award of a contract, and provides that an agency may not award a contract "after the Federal agency has received notice of a protest with regard to such procurement from the Comptroller General . . . ." Finally, as quoted above, subsection (d), dealing with protests seeking to invalidate contracts already awarded, provides that the agency must suspend performance if the "agency receives notice of a protest under this section . . . within 10 days of the date of contract award . . . ." Taking these three provisions together, it is plain that "notice of a protest under this section" refers to the notice from the Comptroller General required by subsection (b). McDonald Welding & Machine Co. v. Lehman, 648 F. Supp. 1338, 1342 (N.D. Ohio 1986).
Moreover, even if the meaning of the statute were less clear, the GAO, the agency charged with implementing 31 U.S.C. § 3553, has construed "notice" in subsection (d) to mean "notice of a protest from the General Accounting Office," 21 C.F.R. § 21.4(b), and such an interpretation is entitled to considerable deference from the courts. E.g., American Maritime Association v. United States, 247 U.S. App. D.C. 55, 766 F.2d 545, 560 (D.C. Cir. 1985).
Thus, the Court finds that the USDA did not receive notice of IRI's protest, as contemplated in 31 U.S.C. § 3553(d)(1), until July 27, 13 days after the Meridian contract was awarded. Accordingly, the USDA was not required to suspend performance pending the GAO's decision on IRI's protest.
IRI also contends that, even if the USDA was not statutorily obligated to suspend performance, it was an abuse of discretion not to do so after Congress extended by 90 days the due date for the panel's report. While the Court is unsure whether failing to suspend a contract outside the ten-day period could ever rise to the level of an actionable abuse of discretion, it is sure that this is not such a case. It is plain from the transcript of the panel's first meeting that from the start the consensus of the panel's members was that an extension from Congress would be necessary to prepare a suitable report. Given the fact that the GAO's decision would not, absent expedition, be due before the new report deadline of November 23, the USDA was justified in concluding that even with an additional 90 days, there was insufficient time to await resolution of IRI's protest before proceeding further with the Meridian contract.
II. Validity of the Procurement Process
The issue to which IRI has devoted the bulk of its attention during the course of this litigation is its contention that the USDA improperly failed to consider IRI for the panel support contract.
In the context of "disappointed bidder" cases, the most closely analogous situation, the courts of this circuit will find a procurement process arbitrary and capricious only if the plaintiff can demonstrate
that (1) the procurement official's decision on matters committed primarily to his own discretion had no rational basis, or (2) the procurement procedure involved a clear and prejudicial violation of applicable statutes or regulations.
Kentron Hawaii, Ltd. v. Warner, 156 U.S. App. D.C. 274, 480 F.2d 1166, 1169 (D.C. Cir. 1973); see also National Maritime Union of America, AFL-CIO v. Commander, Military Sealift Command, 632 F. Supp. 409, 413 (D.D.C. 1986). The Court finds that the administrative record supports neither conclusion.
IRI recognizes that Potter sought appointment to the panel. Thus, prior to selection of the panel, it was reasonable for Gavett to exclude IRI from consideration for the support services contract. Moreover, under the unusual circumstances surrounding establishment of the panel and the need to provide support services as soon as possible after selection of the panel members, Gavett was justified in expediting the selection process. Upon careful review of the administrative record, the Court is convinced that by the time Gavett learned that Potter had not been selected for the panel (and consequently was no longer justified in excluding IRI on conflict of interest grounds) the selection of Meridian was sufficiently complete from the USDA's perspective that IRI could not reasonably expect Gavett to begin anew his evaluation process.
There were technical deficiencies in the justification. Such errors are unfortunate, but almost inevitable, by-products of expedited decision-making. However, the mere existence of deficiencies in the justification does not entitle IRI to the relief it seeks. Comparison of the format sheet provided by the USDA's contract specialist and Gavett's justification indicates to the Court that Gavett was including all of the information he believed was required.
At the time that Gavett and the USDA settled on Meridian for the contract, that firm was the only known contractor deemed qualified to do the work. While the requirement that the justification identify all those who have expressed a written interest in the procurement is arguably broad enough to include identification of those not ultimately considered, the omission here was not prejudicial because the Court has found that at the time Gavett "selected" Meridian, IRI was still considered ineligible due to Potter's conflict of interest.
Accordingly, the Court concludes that plaintiff has failed to demonstrate that the selection of Meridian lacked a rational basis or involved a prejudicial failure to follow applicable statutes and regulations. Consistent therewith, this Memorandum Opinion is accompanied by an Order denying plaintiff's motion for a preliminary injunction and entering judgment on the merits in favor of defendants and against plaintiff.
This matter is before the Court for a ruling on plaintiff's motion for a preliminary injunction and a consolidated decision on the merits. For the reasons set forth in the accompanying Memorandum Opinion, upon consideration of the entire record, it hereby is
ORDERED, that plaintiff's motion for a preliminary injunction is denied. It hereby further is
ORDERED, that defendants' motion to affirm the agency's decision is granted. Judgment is entered in favor of defendants and against plaintiff, and this matter is dismissed with prejudice.