Latecoere Intern., Inc. v. U.S. Dept. of Navy

• Decision Date: 13 April 1994
• Docket Number: No. 93-4031,93-4031
• Citation: 19 F.3d 1342
• Parties: LATECOERE INTERNATIONAL, INC. and Latecoere, also known as Societe Industrielle D'Aviation Latecoere, Plaintiffs-Appellants, v. UNITED STATES of America DEPARTMENT OF the NAVY, H. Lawrence Garrett III, Secretary of the Navy, and Environmental Tectonics Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1342

19 F.3d 1342

62 USLW 2656

LATECOERE INTERNATIONAL, INC. and Latecoere, also known as Societe Industrielle D'Aviation Latecoere Plaintiffs-Appellants, v. UNITED STATES of America DEPARTMENT OF the NAVY, H. Lawrence Garrett III, Secretary of the Navy, and Environmental Tectonics Corporation Defendants-Appellees.

No. 93-4031.

United States Court of Appeals Eleventh Circuit.

April 13, 1994.

As Amended May 27, 1994.

Daniel E. Toomey, Michael A. Gatje, L. James D'Agostino, Wickwire Gavin, P.C., Vienna, VA, for plaintiffs-appellants.

Arnold T. Aikens, Asst. U.S. Atty., Miami, FL, George P. Williams, Dept. of the Navy, Office of the Gen. Counsel, Washington, DC, for defendants-appellees.

Cliff G. Russell, Vice President and Gen. Counsel, Environmental Tectonics Corp., Southampton, PA, for Environmental Tectonics Corp.

Appeal from the United States District Court for the Southern District of Florida.

Before KRAVITCH and CARNES, Circuit Judges, and HAND ^*, Senior District Judge.

CARNES, Circuit Judge:

Latecoere International, Inc., unsuccessfully bid for a contract with the Naval Training Systems Center ("the Training Center"), of the United States Department of the Navy, to provide two gravitational forces pilot training systems. After the Navy awarded the contract to Latecoere's competitor, Environmental Tectonics Corporation ("ETC"), Latecoere commenced this action seeking declaratory and injunctive relief against the United States, the U.S. Department of the Navy, and H. Lawrence Garrett III, in his capacity as Secretary of the Navy (collectively "the Navy"). The Navy moved for dismissal or judgment on the pleadings. Without holding an evidentiary hearing, but after considering evidence outside the pleadings, the district court affirmed the award to ETC, essentially granting summary judgment for the defendants. Latecoere appeals from that ruling.

We find evidence in the record: that Navy officials involved in the procurement process arbitrarily increased ETC's ratings in order for it to obtain the award; that no rational basis exists for the award to ETC instead of Latecoere; that the award was motivated by bias for ETC and against Latecoere, which was based at least in part upon improper consideration of the fact that ETC is an American company while Latecoere is a French company; and that, but for bias and improper considerations, the Navy would have awarded the contract to Latecoere. Accordingly, we reverse the judgment for the defendants.

We begin with a discussion of the facts divided into four subparts. Part I.A describes the applicable procedures for evaluating proposals and awarding a contract such as the one involved in this case; it tells how the procurement process is designed to work. Part I.B discusses what happened the first time through in the evaluation, recommendation, and all but the final selection stages of the process; it tells how the process almost did work as designed. Part I.C discusses what happened when the matter reached the office of the Assistant Secretary of the Navy and improper "Buy American," political concerns were raised; it tells where things went wrong. Part I.D discusses what happened the second time through in the evaluation, recommendation, and selection stages; it tells how the process was manipulated to bring about an improper result.

Part II discusses the procedural history of the case. Part III describes the applicable standards of review. Part IV contains our legal analysis. Part V presents our conclusions and directions for the district court.

Because there are a number of individuals involved and because some of the terminology is military-procurement jargon, we provide, in Appendix A to this opinion, a combined cast of characters and glossary of terms.

I. THE FACTS

As we explain later in this opinion, the district court granted judgment against Latecoere without conducting an evidentiary hearing but after considering matters outside the pleadings. For that reason, we treat the ruling as one of summary judgment, see Fed.R.Civ.P. 12(c), and we review the evidence and all inferences from it in the light most favorable to Latecoere, see Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1532 (11th Cir.1992); Part III.B, below. We will state the facts accordingly, which is not difficult to do because so many of the important facts are undisputed and clearly favor Latecoere's position, anyway.

In January 1989, the Training Center, which is located in Orlando, Florida, issued Request For Proposals No. N61339-89-R-0004 for the design, construction, and maintenance of two G-Tolerance Improvement Program ("G-Tip") Training Systems: one at Lemoore, California, and one at Cecil Field in Jacksonville, Florida. In naval procurement, a "request for proposals" is essentially a detailed solicitation of bids, so we will refer to this one as "the Solicitation." A G-TIP Training System is used to train pilots of high performance jet aircraft to avoid losing consciousness when they encounter strong gravitational forces during sudden acceleration. The system centers on a centrifuge training device, which is essentially a gondola (in which a pilot sits) attached to an arm that propels the gondola (with the pilot inside) in circles. The device is housed in a facility equipped to provide instructional, medical, maintenance, and administrative services. Both the facility and the device are part of the system for which bids were solicited.

A. THE PROCEDURES FOR EVALUATING PROPOSALS AND AWARDING THE CONTRACT: HOW THE PROCESS IS DESIGNED TO WORK

The Solicitation contained lengthy and detailed technical specifications for the design of the G-TIP Training Systems. Those specifications stated that, when making design compromise considerations, the highest priority would be given to the students' safety. The Solicitation also set forth the procedures for evaluating offerors' proposals and for awarding the contract. Offerors were directed to divide their proposals into six volumes, corresponding to major evaluation areas: (I) Device Design; (II) Facility Design; (III) Management Plan; (IV) Integrated Logistics Support; (V) Past Performance; and (VI) Cost. Each proposal volume was further divided into chapters. The first five volumes constituted a technical proposal that was to be evaluated separately from the cost proposal, which was the sixth volume. A Source Selection Evaluation Board ("the Evaluation Board"), consisting of eleven members--and assisted by some thirty advisors--all of whom were engineers, scientists, medical doctors, or other specialists, was charged with evaluating the technical proposals. The G-TIP procurement Contracting Specialist, Frank Barbieri, a member of the Evaluation Board, was charged with evaluating the cost proposals.

The Solicitation stated that the contract would be awarded to "that offeror submitting the 'best value' proposal," meaning "the best technical proposal with appropriate consideration given to cost and other factors." With respect to cost, the Solicitation described the appropriate consideration as follows:

Cost is not expected to be the controlling factor in the selection of a contractor for this solicitation. The degree of importance of cost as a factor could become greater depending upon the equality of the proposals for other factors evaluated; where competing proposals are determined to be substantially equal, total cost and other cost factors would become the controlling factor.

The Solicitation also ranked all of the proposal volumes according to their order of importance, listing the cost volume as the least important. The Training Center specifically reserved, in the Solicitation, the right to award the contract on the basis of initial offers, without negotiations.

The Solicitation assigned the five proposal volumes that comprised the technical proposal the following order of importance, beginning with the most important: Device Design, Facility Design, Management Plan, Past Performance, and Integrated Logistics Support. Teams of Evaluation Board members and advisors were organized to evaluate the chapters within each volume of the proposal and, on the basis of those evaluations, to prepare a narrative assessment identifying the strengths, weaknesses, and risks of each chapter of each volume of the proposal and to assign to each chapter a technical rating and a risk assessment rating. Chapter evaluations would be submitted to proposal volume team leaders for assignment of technical ratings for each volume. Ratings for each volume of the proposal were then to be submitted to the Evaluation Board's Committee Chairperson for assignment of overall proposal ratings.

There were four possible technical ratings:

(1) "exceptional" (exceeding specified performance standards with a high probability of success and no weaknesses);

(2) "acceptable" (meeting specified performance standards with a good probability of success and no significant weaknesses) (3) "marginal" (either failing to meet performance standards but with deficiencies that were correctable without a major rewrite, or failing to provide sufficient information to determine acceptability); and

(4) "unacceptable" (failing to meet specified performance standards due to deficiencies that were not correctable without a major rewrite).

There were also three possible risk assessment ratings--"low," "moderate," and "high"--that measured potential risks of delay, increases in cost, or poor performance. In other words, the worst possible rating was "unacceptable" with "high" risk.

In addition, the Solicitation identified certain chapters of the proposal volumes as "critical areas" of concern to the government, and warned that a proposal rated "unacceptable" for one or more critical chapters might be judged "unacceptable" overall.

The Evaluation Board's ratings and Contracting Specialist Barbieri's cost proposal evaluations were to be forwarded to a ...