THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON MARCH 23, 1995 _________________________________________________ MOTION TO VACATE DENIED; MOTION FOR RELIEF FROM DECISION GRANTED IN PART: February 23, 1995 _________________________________________________ GSBCA 12824-P-REM COMPUTER DATA SYSTEMS, INC., Protester, v. DEPARTMENT OF ENERGY, Respondent, and DYNCORP, Intervenor. Marcia G. Madsen, Andrew D. Ness, Brian W. Craver, and David F. Dowd of Morgan, Lewis & Bockius, Washington, DC; and Charles B. Machion and Peter A. Fish of Computer Data Systems, Inc., Rockville, MD, counsel for Protester. Mary Egger, Patricia D. Graham, and Patricia A. Wentworth, Office of General Counsel, Department of Energy, Washington, DC, counsel for Respondent. David S. Cohen, C. Patteson Cardwell, IV, and G. Brent Connor of Cohen & White, Washington, DC; and Stuart Young of DynCorp, Reston, VA, counsel for Intervenor. Before Board Judges DANIELS (Chairman) and WILLIAMS.[foot #] 1 ----------- FOOTNOTE BEGINS --------- [foot #] 1 Judge Goodman, who participated in the original decision, did not participate in the proceedings on remand and had no part in this decision. ----------- FOOTNOTE ENDS ----------- WILLIAMS, Board Judge. This matter comes before the Board on a mandate from the United States Court of Appeals for the Federal Circuit which instructs the Board to consider whether to vacate the decision on the merits of the above-captioned protest in light of the parties' settlement of this matter. DynCorp v. O'Leary, No. 94-1493 (Fed. Cir. Jan. 4, 1995). In a joint motion, the parties have requested that the Board vacate its July 15, 1994, decision or, in the alternative, grant relief from the decision by deleting the remedy or removing all conditions imposed by the decision on the Department of Energy's (DOE's) delegation of procurement authority (DPA) to enable them to effect a proposed settlement. For the reasons stated below, we deny the parties' request for vacatur. We grant in part the parties' motion for relief from decision, by adding an alternative remedy which enables the agency to proceed with the procurement in any manner consistent with statute and regulation. Background On May 2, 1994, Computer Data Systems, Inc. (CDSI) protested the award of a contract by DOE to DynCorp for information resources management (IRM) support services. DynCorp intervened. In its original fifteen-count complaint, CDSI alleged that DOE relaxed the mandatory experience requirements for DynCorp, conducted an improper technical evaluation of both CDSI's and DynCorp's proposals, failed to conduct meaningful discussions, performed an improper responsibility determination for DynCorp, and conducted an arbitrary and capricious cost evaluation. Further, CDSI alleged that there was an impermissible organizational conflict of interest between DynCorp and DOE, and that the award decision was tainted by bias. CDSI filed an amended complaint adding an allegation of technical transfusion and leveling. After an eight-day hearing, the Board, in a ninety-two-page decision, granted the protest in part, agreeing that the agency conducted an improper technical evaluation and improper discussions and that the cost evaluation was flawed in two respects. As a remedy, the Board revised DOE's DPA by directing the agency to empanel a new Source Evaluation Board (SEB), establish objective standards for reevaluation, clarify its minimum needs and cost evaluation mechanisms, and proceed in accordance with statute and regulation. Specifically, the Board ruled: The Board is unable to ascertain whether the awardee's proposal was properly determined to have the best value or not. Since additional discussions must be held, another round of BAFOs [best and final offers] must be submitted and evaluated. Because this evaluation should begin on a clean slate, unaffected by this particularly intense and difficult litigation process, we direct the establishment of a new source evaluation board. See Communications Network System, Inc. v. Department of Commerce, GSBCA 12705-P, 1994 BPD 63, at 27 (Feb. 24, 1994); Denro, Inc. v. Department of Transportation, GSBCA 11736-P-R, 1992 BPD 381 (Aug. 31, 1992). The SSO [source selection official] need not be replaced. The new SEB shall establish objective standards for ascertaining strengths, weaknesses, and the import of a designation of a "significant" strength or weakness. Similarly, the SEB shall establish objective baseline-type standards for determining similarity in size and scope for the reference contracts. We strongly recommend, but do not order, that the DOE rethink its policy of permitting wholesale destruction of individual evaluators' notes during the evaluation. This prevents a reviewer such as the SSO from ascertaining whether the consensus ratings bear any relationship to independent, individual evaluations. Preserving the individual evaluators' worksheets would enhance the accountability of the process. Next, the SEB must begin anew to perform its reference checks for CDSI's GSA [General Services Administration] contracts and DynCorp's Kwajalein and FLTAC [the U.S. Navy Fleet Analysis Center Engineering and Technical Services] contracts and to rescore criteria 1 and 2. The SEB shall also reanalyze proposals with regard to the use of uncompensated overtime and treat all offerors equally. After reevaluating proposals in that fashion, the SEB shall engage in discussions as necessary, and disclose to all offerors the standard it will use in the evaluation of cost BAFOs. The SEB shall then call for another round of BAFOs and proceed in accordance with statute and regulation. We recognize that the empaneling of a new SEB may cause the agency inconvenience. Nonetheless, after careful consideration, we conclude that this is the only manner in which to ensure that further competition is on an equitable basis. Computer Data Systems, Inc. v. Department of Energy, GSBCA 12824-P, slip op. at 91-92 (July 15, 1994). To maintain services during pendency of the protest, DOE extended CDSI's incumbent contract through August 31, 1994, and again through the end of February 1995. On August 5, 1994, DynCorp filed a protest, GSBCA 12826-P, challenging any further extension of CDSI's incumbent contract. The Board subsequently issued an order of partial suspension of services under CDSI's contract. On September 2, 1994, DynCorp filed an appeal of the Board's July 15, 1994, decision with the United States Court of Appeals for the Federal Circuit. The parties have represented that: On September 28, 1994, the parties to CDSI's Protest agreed on a resolution of their dispute concerning this procurement and executed a settlement agreement providing for the award of two contracts, one to DynCorp and the second to CDSI, with the work described under the Solicitation approximately equally divided between the two. Joint Memorandum in Support of Computer Data Systems, Inc.'s, DynCorp's and the United States Department of Energy's Motion for Vacatur and/or Relief from Decision (Joint Memorandum) at 6. On September 29, 1994, the parties filed with the Board a joint motion for relief from decision in GSBCA 12824-P and to dismiss GSBCA 12926-P. This motion, like the instant one, sought relief from our decision of July 15, 1994, and requested that the Board alter its remedy to amend DOE's DPA to permit implementation of a settlement agreement which included the award of two contracts. On October 4, 1994, the parties withdrew their joint motion and commenced discussions which resulted in an alternative settlement arrangement involving the award of a single prime contract to DynCorp. In addition, the parties have represented that DynCorp reached an agreement with Computer Sciences Corporation (CSC), a third offeror in the competitive range which did not join in the protest. Under that agreement, CSC is to receive a subcontract and will not object to the proposed settlement. Joint Memorandum at 7 and Exhibit 1.[foot #] 2 ----------- FOOTNOTE BEGINS --------- [foot #] 2 Specifically, in a letter dated January 18, 1995, to the president of DynCorp's Federal Sector Group, CSC stated that Pursuant to this MOU [memorandum of understanding], at such time as a prime contract is awarded to DynCorp as a result of the settlement, DynCorp will award a subcontract to CSC. The subcontract award will reflect the estimated Direct Productive Labor Hours and costs as contained in CSC's MOU with DynCorp and CSC's proposal as submitted to DOE on January 17, 1995 and summarized to DynCorp on January 13, 1995. (continued...) ----------- FOOTNOTE ENDS ----------- The parties have represented that on November 30, 1994, they executed a settlement agreement superseding their earlier agreement which provided for the award of one contract to DynCorp with award by DynCorp of subcontracts to both CDSI and CSC. Joint Memorandum at 7. The parties represented that on December 30, 1994, DynCorp and DOE, with the supporting declaration from CDSI, moved the United States Court of Appeals for the Federal Circuit "to dismiss DynCorp's appeal without prejudice on grounds of pending settlement, and to remand it to the GSBCA with instructions to consider vacating its decision."[foot #] 3 Joint Memorandum at 7. Discussion The parties ask this Board to vacate its decision or grant the agency relief from the decision claiming that they will be unable to implement their settlement unless the Board takes such action. The parties point out that, under the Brooks Act, DOE is prohibited from awarding a new contract under the solicitation except in accordance with the specific terms of the Board's decision, i.e., by empaneling a new SEB and conducting a reevaluation in the manner specified in that decision. The parties claim that a decision to vacate is required by the Federal Circuit's decision in Federal Data Corp. v. SMS Data Products, 819 F.2d 277 (Fed. Cir. 1987), and would be consistent with the United States Supreme Court's recent ruling in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 115 S. Ct. 386 (1994). In the alternative, the parties urge the Board to grant relief from decision pursuant to Board Rule 33(a)(4) and (6). In support of this request, the parties argue that because they have settled and the Federal Circuit has instructed the Board to consider vacatur, it is no longer necessary to implement the Board's decision and it is no longer equitable that the decision should have prospective application. Joint Memorandum at 29. ----------- FOOTNOTE BEGINS --------- [foot #] 2 (...continued) Based on the above, and as discussed in the MOU, CSC has agreed not to bring any protest against the award of [this] contract. Joint Memorandum, Exhibit 1. [foot #] 3 The parties have not submitted their appellate submissions or their proposed settlement agreement to the Board. The sole filing on remand is the joint motion and memorandum. ----------- FOOTNOTE ENDS ----------- I. Should the Board Vacate Its Decision in Light of the Parties' Settlement? After reviewing the cases cited, we conclude that the parties' request that we vacate the merits decision in this protest is inconsistent with the holding and rationale of the United States Supreme Court's recent decision in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 115 S. Ct. 386. There, the Court held that "mootness by reason of settlement does not justify vacatur of a judgment under review." Id. at 393. The Court revisited its decision in United States v. Munsingwear, Inc., 340 U.S. 36 (1950), which stated that "[t]he established practice of the Court in dealing with a civil case from a court in the federal system which has become moot while on its way here or pending our decision on the merits is to reverse or vacate the judgment below and remand with a direction to dismiss." Id. at 39. In the U.S. Bancorp case, the Court expressly stated that "[t]he principles that have always been implicit in our treatment of moot cases counsel against extending Munsingwear to settlement." U.S. Bancorp, 115 S. Ct. at 391. The Court pointed out that a principal inquiry in determining whether to vacate is whether the parties seeking relief from the judgment below caused the mootness by voluntary action. The Court noted that where mootness results from settlement, the losing party has voluntarily forfeited the appeal, thereby surrendering its claim to the equitable remedy of vacatur. U.S. Bancorp, 115 S. Ct. at 392. The Court explained: The judgment is not unreviewable, but simply unreviewed by [the party's] own choice. The denial of vacatur is merely one application of the principle that '[a] suitor's conduct in relation to the matter at hand may disentitle him to the relief he seeks.' Id. (citation omitted). Thus, the Court reasoned that the case would stand no differently than if jurisdiction were lacking because the losing party failed to appeal at all. This is precisely the situation before the Board. The parties by their voluntary action have abandoned the appeal. Another consideration the Supreme Court articulated in deciding whether or not a tribunal should grant vacatur of a decision is the public interest. The Court quoted: 'Judicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by vacatur.' U.S. Bancorp, 115 S. Ct. at 392 (quoting Izumi Seimitsu Kogyo Kabushiki Kaisha v. U.S. Phillips Corp., 114 S. Ct. 425, 428, (1993) (Stevens, J., dissenting)). The Court explained that to allow a party to seek relief from a judgment not through appeal, but through a "secondary remedy of vacatur as a refined form of collateral attack on the judgment," would disturb the orderly operation of the federal judicial system. The Court went on to state that "exceptional circumstances may conceivably counsel" vacatur, but that "those exceptional circumstances do not include the mere fact that the settlement agreement provides for vacatur -- which neither diminishes the voluntariness of the abandonment of review nor alters any of the policy considerations we have discussed." U.S. Bancorp, 115 S. Ct. at 393. Thus, the parties' efforts here to characterize their settlement as an "exceptional circumstance" which requires vacatur must fail. The fact that the parties condition their settlement upon vacatur or revision of our decision does not alter this result.[foot #] 4 In this case, the public policy favoring the orderly operation of the Board and the precedential effect of the decision outweighs any policy favoring post-decisional settlements. Indeed, as the Court recognized, permitting parties to undo a tribunal's decision by settling on appeal may have the effect of discouraging settlements at the stage when they are most beneficial, i.e., pre-decision. The Court explained: But while the availability of vacatur may facilitate settlement after the judgment under review has been rendered and certiorari granted (or appeal filed), it may deter settlement at an earlier stage. Some litigants, at least, may think it worthwhile to roll the dice rather than settle in the district court, or in the court of appeals, if, but only if, an unfavorable outcome can be washed away by a settlement- related vacatur. And the judicial economies achieved by settlement at the district-court level are ordinarily much more extensive than those achieved by settlement on appeal. We find it quite impossible to assess the effect of our holding, either way, upon the frequency or systemic value of settlement. U.S. Bancorp, 115 S. Ct. at 393. Thus, the "extraordinary remedy" of vacatur is not appropriate here. See U.S. Bancorp, 115 S. Ct. at 392, 393. II. Should the Board Grant the Parties Relief From Decision? In the alternative, the parties seek relief from our decision in the form of deletion of the remedy from the Board's ----------- FOOTNOTE BEGINS --------- [foot #] 4 Given our amendment of our decision in the manner discussed, infra, the parties may be able to settle. ----------- FOOTNOTE ENDS ----------- decision on the merits.[foot #] 5 While this resolution might conceivably be appropriate in some circumstances, the Board believes that the public policy favoring preserving the viability of unreviewed legal precedent militates against a wholesale deletion of the remedy. The remedy fashioned by the Board was that which, in the view of the Board, best rectified the myriad violations of statute and regulation found. Nothing in the parties' motion papers persuades us that this relief was unwarranted or incorrect. Recognizing, however, that the detailed remedy fashioned by the Board did not contemplate alternative legal approaches to proceeding with the procurement, the Board grants the parties' request for relief from decision in two respects. First, we delete the words "the only manner in which" from the last sentence of the paragraph beginning on page 91 and ending on page 92 of our decision and replace those words with "an appropriate mechanism." This sentence as amended reads: "Nonetheless, after careful consideration, we conclude that this is an appropriate mechanism to ensure that further competition is on an equitable basis." Second, immediately following this amended sentence, we insert: In the alternative, the agency's delegation of procurement authority is amended to permit it to proceed to acquire its needs in any manner consistent with statute and regulation. The Board, as the parties have urged, should not review the parties' settlement. See Joint Memorandum at 11. However, the Board deems it appropriate to amend its decision to permit the agency additional latitude in acquiring its needed services. Decision The parties' joint motion for vacatur is DENIED. The parties' joint motion for relief from decision is GRANTED IN PART. _____________________________ MARY ELLEN COSTER WILLIAMS Board Judge I concur: ----------- FOOTNOTE BEGINS --------- [foot #] 5 Given the remand, the Board finds the motion for relief from decision timely. ----------- FOOTNOTE ENDS ----------- ____________________________ STEPHEN M. DANIELS Board Judge