Mobile Med. Int'l Corp. v. United States
| Decision Date | 31 August 2010 |
| Docket Number | No. 10-148C,10-148C |
| Parties | MOBILE MEDICAL INTERNATIONAL CORPORATION, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
REDACTED OPINION
Post-Award Bid Protest; Injunctive Relief; GSA Federal Supply Schedule; Procurement Integrity Act, 41 U.S.C § 423; Task Order Award Protest; Trade Secrets Act, 18 U.S.C. § 1905
Blair Andrews, Kilpatrick Stockton LLP, Atlanta, GA, for the plaintiff. With her were Reginald Williamson and Michael Tyler, Kilpatrick Stockton LLP, Atlanta, GA.
James Sweet, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for the defendant. With him were Jeanne E. Davidson, Director, and Tony West, Assistant Attorney General, Civil Division. Of counsel, Barton B. Evans, Houston Office of Regional Counsel, Department of Veterans Affairs, Houston, TX.
O P I N I O N
This case involves a post-award bid protest filed with the court by Mobile Medical International Corporation (MMIC).2 MMIC's protest arises from the award of a task order to Gerling & Associates (Gerling), through the General Services Administration (GSA) Federal Supply Schedule (FSS). Plaintiff alleges impropriety by the Department of Veterans Affairs, Southeast Louisiana Veterans Health Care Systems (the Agency) when the Agency procured mobile medical units through the GSA FSS. Plaintiff MMIC brings claims against the Agency for alleged violations of the federal Procurement Integrity Act, 41 U.S.C. § 423 (2006) (); the federal Trade Secrets Act, 18 U.S.C. § 1905 (2006) (Count II); for arbitrary and capricious Agency action based on the misuse of the GSA FSS (Count III); for arbitrary and capricious GSA action in accepting a modification to a GSA FSS 23 Vehicle Multiple Award Schedule contract (the GSA schedule contract) (Count IV); and for the uncompensated taking of proprietary information (Count V). MMIC seeks preliminary and permanent injunctive relief, monetary damages, and a declaratory judgment.
As a result of Hurricane Katrina, the New Orleans Veterans Affairs Medical Clinic in New Orleans, Louisiana was devastated and the healthcare system in New Orleans became fragmented. The Agency contacted MMIC about acquiring mobile medical trailers in an effort to ensure continuity of care, while awaiting repair of the clinic. On January 5, 2009, the Agency emailed MMIC, asking for cost information about "different types of mobile medical trailers," and requested that the information be provided no later than January 7, 2009. MMIC responded to the Agency's request on January 7, 2009, via email, with an attached Budgetary Proposal. The email from plaintiff contained an automatically generated confidentiality stamp which provided that:
This e-mail and any attachments are for the sole use of the intended recipient(s) and may contain technical data within the definition of the International Traffic and Arms laws and regulations of the U.S. This e-mail and any attachments are confidential and may contain confidential, proprietary Mobile Medical International Corporation Information. If you are not the above named recipient, or the employee or agent responsible to deliver this e-mail to the intended recipient, you are hereby notified thatany use, disclosure, printing, copying, or distribution of the e-mail or its attachments is strictly prohibited. If you have received this e-mail in error, please immediately notify the sender by telephone or by reply e-mail and destroy this e-mail and any attachments.
MMIC's Budgetary Proposal included a drawing of Mobile Medical's Mobile Surgery Unit, TM3 a list of "Integrated Equipment" and a Justification for Sole Source Procurement. The drawing of the Mobile Surgery UnitTM included a legend providing that: (capitalization in original).
The list of "Integrated Equipment" set forth the custom designed and commercially available equipment used in MMIC's mobile medical units, including a brief description, the model, and the manufacturer of each type of equipment, but noted that brands and models could be substituted with equivalents without notice.4 In its Justification for Sole Source Procurement, MMIC asserted that, to its knowledge, no other manufacturer in the United States was qualified to produce Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and Medicare approved mobile surgical units.
The Agency used MMIC's proposal when it requested funding for medical mobile units and gave MMIC a Statement of Work (SOW) for six mobile trailers on May 19, 2009. On May 21, 2009, the Chief of Purchasing and Contracting for the Agency posted a Sources Sought Notification on the FedBizOpps website, FBO VA-256-09-RP-0236. The posting indicated that the Agency intended to negotiate a sole source contract for six mobile medical units with MMIC, but that it would evaluate proposals from other interested companies, with the condition that whether to compete the proposed procurement was within the sole discretion of the government. Seven companies expressed an interest in the procurement, two of which expressly contradicted the notion that MMIC was the sole provider of the required mobile medical units, and all of which implicitly or expressly claimed to be able to provide the type of mobile surgical units that the Agency sought.5
After the Sources Sought Notification posting, the Agency obtained the results of a responsibility check on MMIC from Dun & Bradstreet, as required by VA policy. According to the contracting officer, the responsibility check predicts the "likelihood that a company will obtain legal relief from creditors or cease operations without paying the creditors in full over the next 12 months." MMIC had a Dun & Bradstreet rating of [deleted] on a risk scale from 1 (lowest risk) to 9 (highest risk). According to the parties' joint stipulation of facts and a directive issued to the heads of the VA Contracting Authorities, for any contractor with a risk score of 7 or higher, the contracting officer can continue with the procurement, but must first submit additional documentation of a due diligence review to justify the award to a high-risk contractor.
To continue with the procurement process in this instance, the contracting officer submitted a request to the Veterans Integrated Service Network on June 16, 2009 to procure the mobile units through full and open competition. The Office of Small and Disadvantaged Business Utilization, however, denied the request, stating that service-disabled, veteran-owned small businesses could manufacture the units. As an alternative to procuring the units from service-disabled, veteran-owned small businesses, the Office of Small and Disadvantaged Business Utilization suggested buying them through the GSA FSS. The contracting officer decided that service-disabled, veteran-owned small businesses were not capable of producing the units, and sought information about the capacity of companies on the FSS to produce the units. The contracting officer contacted her counterpart at the GSA FSS office, who informed her that the mobile units could be purchased through the "Firefighting Vehicles and Accessories" category or the "New Technologies" category of the GSA FSS.
On June 25, 2009, the contracting officer posted a Request for Information (RFI) with a draft SOW on GSA e-Buy to fifty-three vendors to determine whether FSS companies were capable of meeting the Agency's needs for the mobile surgical units. The contracting officer reported that five companies expressed an interest in the request by the July 6, 2009 deadline.6 The contracting officer also conducted market researchand determined that several companies on the GSA schedule were capable of producing the units.7 On June 30, 2009, the contracting officer sought approval from the Veterans Integrated Service Network and the Office of Small and Disadvantaged Business Utilization to buy the mobile units through the FSS and permission was granted.
On June 30, 2009, Mark Munroe of MMIC emailed the contracting officer to inquire about the status of the procurement. The contracting officer explained that, based on the response from the Office of Small and Disadvantaged Business Utilization, the Agency could not release the solicitation for full and open competition, that it would compete the solicitation on the GSA FSS, that several FSS companies had affirmed they could provide the necessary mobile units, and that MMIC should consider "getting on that [GSA] schedule" so it could take advantage of future GSA solicitations. On July 27, 2009, MMIC replied to the contracting officer's email, stating that it had submitted its mobile surgery and mobile endoscopy units for inclusion on the GSA schedule and that, "[h]opefully, procuring the [mobile surgery units] through GSA will simplify your process and speed the acquisition for the New Orleans veterans." MMIC did not object to the use of the GSA FSS to acquire mobile medical units until the Agency issued a delivery order to Gerling on October 8, 2009.8
On August 18, 2009, the contracting officer posted a Request for Quote (RFQ) and a SOW on GSA e-Buy for six mobile operation and procedure room trailers. The RFQ contained a rendering of the proposed trailers, similar to that submitted by MMIC in its Budgetary Proposal.9 According to the contracting officer, the drawing was based partly on brochures distributed by MMIC and slides from a presentation given by MMIC at an event in Florida in which plaintiff had displayed one of its Mobile Surgery Units.TM10 The contracting officer stated that she also had relied on a trailer...
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