that Mr. Cole's conflict attains this minimal standard.
5. Innocence of Postal Air.
Postal Air argues that the contract should not be overturned because (1) Postal Air was an innocent party; and (2) overturning the award would not protect the integrity of the procurement process. Plaintiffs counter by arguing that the knowledge of Mr. Christopher, Mr. Kalitta's eventual partner, must be imputed to Mr. Kalitta as both eventually are agents of the same corporate entity.
In any event, the integrity of Postal Air or of Mr. Kalitta is not the only factor to be considered. Rather, the integrity that must be maintained is not only of the offerors, the innocence of whom the court need not presently adjudicate, but also of the government itself. The entire process -- both the actions of the offerors and the government -- must be held up to scrutiny:
Conflict of interest litigation is 'directed at an evil which endangers the very fabric of a democratic society, for a democracy is effective only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption.'
Crandon v. United States, 494 U.S. 152, 165, 108 L. Ed. 2d 132, 110 S. Ct. 997 n.20 (quoting United States v. Mississippi Valley Generating Co., 364 U.S. 520, 562, 5 L. Ed. 2d 268, 81 S. Ct. 294 (1961)). Thus, although Postal Air may possibly be an unfortunate victim, the public's interest in the integrity of the process does demand that the contract be overturned. See Mississippi Valley, 364 U.S. at 565-66.
6. 41 U.S.C. § 423.
Postal Air asserts that the conduct in this case comports with 41 U.S.C. § 423, the Procurement Integrity Act, which Postal Air describes as the "strictest of government contract laws." As a result, it claims, the court should find no conflict and uphold the contract. Postal Air Motion at 34. Whether or not Mr. Cole's conduct comports with the Procurement Integrity Act is not controlling, however. At issue in this case is Mr. Maytan's unjustified and irrational change of standards: first, he determined -- correctly -- that Mr. Cole must "affirmatively reject" Mr. Kalitta's overtures or be removed from the procurement; later, he retained Mr. Cole even though Mr. Cole violated those instructions. It is the Postal Service's decision to retain Mr. Cole despite this violation that is questioned and that requires that this contract be overturned.
7. Emery's Alleged Factual Mischaracterizations.
Defendants assert that Emery falsely and intentionally led this court, at the preliminary injunction stage, into believing that Mr. Kalitta had made Mr. Cole a job "offer." Based on the minimal record at the time, and the limited extent of discovery the court had authorized, the court refuses to impute malice to Emery. Moreover, Emery subsequently amended its argument to reflect the facts.
However, the court is greatly disturbed that defendants, while complaining of Emery's alleged past misdeeds, themselves are clearly guilty of repeated mischaracterizations of the evidence even now, at the summary judgment stage of this litigation. Both the Postal Service and Postal Air describe the letters of Messrs. Vandamm and Maytan, dated June 2 and June 8, as merely stating that a conflict of interest would exist if Mr. Cole resumed negotiations with Mr. Kalitta. See Postal Air Motion at 31; Postal Service Motion at 7. Neither acknowledges, however, that both letters required Mr. Cole to affirmatively reject Mr. Kalitta's invitation. Such a mischaracterization can only be seen as an intentional attempt to mislead the court.
Based on the facts and for the reasons stated above, the court determines that work on the ANET-93-01 procurement was tainted by the conflict of interest of Mr. Cole from May 26, 1992. The only remedy, therefore, is to redo the part of the solicitation and evaluation in which Mr. Cole participated after that date. Thus, the United States Postal Service shall resolicit the ANET-93-01 contract. All portions of the contract on which William G. Cole worked after May 26, 1992, including the design of the scoring system for the technical evaluations and the grading of the offerors' initial proposals, must be redone. And, since the conflict arose before the offerors submitted their initial proposals (and all offerors were therefore affected by the taint), both plaintiffs shall be permitted to submit initial proposals and best-and-final offers (BAFOs).
A separate order shall issue this date.
Royce C. Lamberth
United States District Judge
DATE: DEC 22 1992
ORDER AND FINAL JUDGMENT - December 22, 1992, Filed
This case comes before the court on all four parties' motions for summary judgment. Upon consideration of the arguments of counsel, and for the reasons set forth in the accompanying Memorandum Opinion, it is hereby ORDERED that:
1. The ANET-93-01 contract, awarded by the United States Postal Service to Kitty Hawk Air Cargo, Inc., on September 16, 1992, shall be and is declared illegal and void.
2. The United States Postal Service, its officers, agents, and employees, and all other persons in active concert or participation with them, are permanently enjoined from authorizing or performing any work under the contract awarded on September 16, 1992, pursuant to solicitation ANET-93-01; and from incurring additional obligations and authorizing expenditures by any contractor of funds for performance of the work on the ANET contract.
3. The United States Postal Service shall re-solicit all portions of the contract on which William G. Cole worked after May 26, 1992, including the design of the scoring system for the technical evaluations and the grading of the offerors' initial proposals. Plaintiffs shall be permitted to submit initial proposals and best-and-final offers (BAFOs).
4. Defendants need not seek a stay from this court of this permanent injunction before seeking appellate relief as such a stay will not be granted. Leave to seek an immediate stay from the Court of Appeals pending appellate review of this decision is therefore appropriate.
5. Emery and Express One's motions for summary judgment and their motions for a permanent injunction are GRANTED to the extent set forth herein and in the accompanying memorandum opinion. The summary judgment motions of Postal Air and the United States Postal Service are DENIED. Final judgment is hereby entered for plaintiffs Emery and Express One.
Royce C. Lamberth
United States District Judge
DATE: DEC 22 1992