GRU, Alm.del - 2014-15 (2. samling) - Bilag 5: Afgørelse fra US Court of Federal Claims vedr. servicekontrakt på Thule Sir Base

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In the United States Court of Federal Claims

Nos. 15-215C, 15-272C, and 15-330C (consolidated)

(Filed Under Seal: May 28, 2015)

(Reissued: June 5, 2015)

PER AARSLEFF A/S,

Plaintiff,

UNITED STATES,

Defendant,

and

EXELIS SERVICES A/S,

Defendant-Intervenor.

)

Consolidated post-award bid protests;

limitation on competition due to

international agreement; 10 U.S.C.

§ 2304(c); FAR § 6.302.4; inapplicability

of bar on jurisdiction over actions based

on treaty; 28 U.S.C. § 1502; mistake in a

critical eligibility criterion; latent defect

discovered by procuring agency prior to

award but not corrected; considerations

affecting equitable relief

Paul A. Debolt, Venable LLP, Washington, D.C., for Per Aarsleff A/S, plaintiff in

No. 15-215C. With Mr. Debolt on the briefs and at the hearing was James Y. Boland, Venable

LLP, Tysons Corner, Virginia. With him on the briefs was Anna E. Pulliam, Venable LLP,

Tysons Corner, Virginia.

James J. McCullough, Fried, Frank, Harris, Shriver & Jacobson LLP, Washington, D.C.

for Greenland Contractors I/S, plaintiff in No. 15-272C. With Mr. McCullough on the briefs

and at the hearing was Michael J. Anstett, Fried, Frank, Harris, Shriver & Jacobson LLP,

Washington, D.C. With him on the briefs were Aaron T. Tucker and Samuel W. Jack, Fried,

Frank, Harris, Shriver & Jacobson LLP, Washington, D.C.

Kevin J. Cosgrove, Hunton & Williams LLP, Norfolk, Virginia for Copenhagen Arctic

A/S, plaintiff in No. 15-330C.

William P. Rayel, Trial Attorney, Commercial Litigation Branch, Civil Division, United

States Department of Justice, Washington, D.C., for the United States. With Mr. Rayel on the

briefs were Benjamin C. Mizer, Acting Assistant Attorney General, United States Department of

Justice, Washington, D.C., Robert E. Kirschman, Jr., Director, and Scott D. Austin, Assistant

Director, Commercial Litigation Branch, Civil Division, United States Department of Justice,

Washington, D.C.

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Kevin P. Connelly, Vedder Price P.C., Washington, D.C. for Exelis Services A/S. With

Mr. Connelly on the briefs were Eric J. Marcotte, Marques O. Peterson, Kelly E. Buroker, and

Caroline A. Keller, Vedder Price P.C., Washington, D.C.

OPINION AND ORDER

LETTOW, Judge.

In this tripartite bid protest, plaintiffs Per Aarsleff A/S (“Per Aarsleff”), Greenland

Contractors I/S (“Greenland Contractors”), and Copenhagen Arctic A/S (“Copenhagen Arctic”)

challenge the decision of the United States Department of the Air Force Space Command (“Air

Force” or “government”) to award a contract to Exelis Services A/S (“Exelis Services”) under

Request for Proposals (“RFP” or “Solicitation”) No. FA2523-12-R-0006 to operate, maintain,

and support Thule Air Base, a United States Air Force Base located in a remote area of

northwestern Greenland. Although all four offerors in this Solicitation were rated as technically

acceptable by the Air Force, Exelis Services received the contract (“Thule Contract”) based upon

the Air Force’s evaluation that it had the lowest-price, technically acceptable proposal.

All three plaintiffs argue that the award to Exelis Services was improper because Exelis

Services is a wholly owned Danish subsidiary of an American company, and therefore, it failed

to meet an eligibility requirement set forth in the RFP that limited participation to Danish or

Greenlandic businesses. Copenhagen Arctic and Greenland Contractors contend that the Air

Force committed further error by failing to evaluate compliance with a requirement in the RFP

that offerors maximize subcontracts from Danish and Greenlandic sources and, to the extent that

using a Danish or Greenlandic subcontractor was not feasible, to justify the use of a foreign

subcontractor. Greenland Contractors also avers that the Air Force engaged in misleading

discussions regarding Greenland Contractors’ proposed price and failed to evaluate whether the

other offerors had justified their significantly lower pricing. In these circumstances, plaintiffs

request injunctive relief setting aside the contract with Exelis Services and requiring the agency

to reevaluate their proposals under the terms of the RFP, consistent with international

agreements.

The protestors previously raised similar claims before the Government Accountability

Office (“GAO”), which denied relief in a decision dated February 18, 2015.

See Per Aarsleff

A/S,

B-410782, et al., 2015 CPD ¶ 86, 2015 WL 1004252 (Comp. Gen. Feb. 18, 2015).

Because this opinion and order might have contained confidential or proprietary

information within the meaning of Rule 26(c)(1)(G) of the Rules of the Court of Federal Claims

(“RCFC”) and the protective orders entered in these consolidated cases, it was initially filed

under seal. The parties were requested to review this order and to provide proposed redactions

of any confidential or proprietary information. The resulting redactions are shown by brackets

enclosing asterisks,

e.g.,

“[***].” Editorial changes have also been made.

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Each of the three plaintiffs has submitted motions for judgment on the administrative

record pursuant to RCFC 52.1(c)(1), and the government and Exelis Services have filed cross-

motions for judgment. The motions have been fully briefed and were addressed at a hearing held

on May 22, 2015. The case is now ready for disposition.

FACTS

Thule Air Base

Location and environment.

Thule Air Base is sited in an austere area of the world, surrounded by glaciers and North

Star Bay. AR 83-4608 (Thule Air Base Acquisition Plan (approved Mar. 3, 2014)).

Specifically, this northernmost military installation is located in northwestern Greenland,

approximately 600 miles north of the Arctic Circle and 900 miles south of the North Pole. AR

20c-668 (Contracting Officer’s Statement of Facts (Dec. 12, 2014)). Due to its position within

the Arctic Circle, the ground of the Air Base is permanently frozen to a depth of at least 1,000

feet throughout the year. AR 83-4607. Temperatures are severe, averaging from 0 to -30

degrees Fahrenheit during the winter months and dropping to -75 degrees Fahrenheit with wind

chill.

Id.

While the days are 24 hours long from April through August, there is no sunlight

between November and January.

Id.

The “storm season,” in which Thule Air Base faces the

most extreme weather conditions, occurs from September 15 through May 15.

Id.

By virtue of its location, Thule Air Base offers strategic military advantages in the Arctic

region. Its mission is to “provide early warning and attack assessment of ballistic missile

launches, provide space surveillance data and . . . provide tracking, telemetry and command[] . . .

of earth orbiting satellite vehicles.” AR 88-5270 (Solicitation No. FA2523-12-R-0006). These

The recitations that follow constitute the court’s findings of fact based on the

administrative record of the procurement filed pursuant to RCFC 52.1(a),

see Bannum, Inc. v.

United States,

404 F.3d 1346, 1356 (Fed. Cir. 2005) (noting that bid protest proceedings

“provide for trial on a paper record, allowing fact-finding by the trial court”), and the parties’

evidentiary submissions related to prejudice and equitable relief,

see Holloway & Co. v. United

States,

87 Fed. Cl. 381, 391 n.12 (2009) (“It is the responsibility of th[e] court, not the

administrative agency [conducting the procurement], to provide for factual proceedings directed

toward, and to find facts relevant to, irreparability of harms or prejudice to any party or to the

public interest through grant or denial of injunctive [or declaratory] relief.”) (quoting

PGBA,

LLC v. United States,

60 Fed. Cl. 567, 568 n.1 (2004),

aff’d,

389 F.3d 1219 (Fed. Cir. 2004)).

Citations to the administrative record refer to the record filed on March 18, 2015 in the

protest of Per Aarsleff and the records filed on April 7, 2015 and April 15, 2015, which

supplement and amend the administrative record based on the protests of Greenland Contractors

and Copenhagen Arctic, respectively, and with further relevant materials located by the agency.

The record is paginated sequentially and is also divided into tabs. In citing to the administrative

record, the court will first designate the tab, followed by page number,

e.g.,

AR 83-4608 refers to

page 4608, which is located in tab 83 of the record.

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responsibilities specifically include “sea-launched and intercontinental ballistic missile attack

warning and assessment for the 21st Space Wing (21 SW), space surveillance for 21 SW, and

satellite telemetry, tracking, and command for the 50th Space Wing (50 SW).” AR 83-4603. In

addition, Thule Air Base supports both the Canadian and Danish Arctic weather stations.

Id.

The Arctic environment also makes Thule Air Base a suitable location for a variety of Arctic

research operations conducted by agencies of the United States, foreign governments, academia,

and private entities.

The Defense Area of Thule Air Base is approximately 275 square miles. AR 83-4608.

The Defense Area and adjacent land lack paved roads and amenities common on most military

installations, such as banks, a commissary, and fast food chains.

Id.

There is no “downtown”

area and the closest village, Qaanaaq (population 700), is located 75 miles away, accessible by

helicopter or dogsled during the winter and by boat during the summer. AR 83-4648. Unlike a

majority of bases serving the United States military, all personnel supporting Thule Air Base live

within the Thule Defense Area in facilities provided by the United States government.

Id.

Thule

Air Base houses 700 to 900 individuals, with the highest number of staff living on the base

during the summer construction season. AR 83-4603.

Given the harsh Arctic environment, profound logistical challenges arise in supplying

fuel, materials and non-perishable items to individuals working and living on Thule Air Base.

AR 83-4608. The seaport is only available during several summer months; for the remaining

months, airlift is the sole type of transportation to and from the base.

Id.

Thule Air Base has a

lengthy runway that is not always fully available. Prelim. Inj. Hr’g Tr. 103:8-23 (Apr. 2, 2015).

Specifically, large planes will be unable to land at Thule Air Base this summer. Prelim. Inj. Hr’g

Tr. 104:3-10.

Also, flight delays and cancellations are not infrequent during the winter, which

can “result[] in passengers, cargo (including mission-critical parts and subsistence) being

stranded at the originating or en-route airport.” AR 83-4608.

Bilateral agreements and understandings.

With the exception of foreign policy and defense, which is within the competence of the

Kingdom of Denmark, Greenland is a self-governing entity of the Danish government. AR 83-

4606. Thule Air Base was created pursuant to the 1951 Defense of Greenland Agreement (“1951

Agreement”) between the governments of the United States and Denmark.

See

AR 83-4765

(Defense of Greenland Agreement, 2 U.S.T. 1485 (signed Apr. 27, 1951 and effective June 8,

1951)). “The 1951 Agreement is the foundational agreement for the presence of the U.S. armed

forces in Greenland and was entered into . . . ‘in accordance with the principles of self-help and

mutual aid, and having been requested by the North Atlantic Treaty Organization (NATO) to

negotiate arrangements under which armed forces of the parties to [NATO] may make use of

Further citations to the transcript of the preliminary injunction hearing will omit

reference to the date.

Limited flights from the United States and Copenhagen, Denmark are regularly

scheduled but frequently must be cancelled due to weather and other circumstances. AR 83-

4608.

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facilities in Greenland in defense of Greenland and the rest of the North Atlantic Treaty area.’”

AR 32-2650 ¶ 5 (Legal Opinion of Kevin A. Doherty (Jan. 26, 2015)) (citing 1951 Agreement).

Under its terms, the Air Force is permitted “rent-free use of the land on which Thule Defense

Area is located.” AR 83-4648.

Since the inception of Thule Air Base, the United States and Danish governments have

engaged in negotiations regarding contractual opportunities to support the base.

See, e.g.,

20zf-1463 to 1464 (Letter from William Thurman to Air Force Regarding Danish Participation

in U.S. Defense Projects in Greenland (Aug. 29, 1962));

see also

Def.’s Opp’n to Pls.’ Motions

for Prelim. Inj. App. (“Def.’s Opp’n to Pls.’ Mots. for Prelim. Inj.”) App. at 50, ECF No. 41

(Joint Statement of the United States and the Kingdom of Denmark on the Resolution of the

Thule Base Maintenance Contract Acquisition Matter (Mar. 2015) (“Joint Statement”)) (“For

more than 60 years, the Kingdom of Denmark, including Greenland, and the United States have

cooperated to provide for the defense of Europe and North America through mutually beneficial

operations at Thule Air Base.”).

In June of 1962, an Aide Memoire was drafted by the United

States Department of State (“State Department”) to explicate certain provisions of the 1951

Agreement. AR 20zf-1465 to 1470 (Aide Memoire (June 6, 1962)). Specifically, the Aide

Memoire “[wa]s made . . . with regard to future Danish participation in work in United States

defense projects in Greenland.” AR 20zf-1465. Its objective was to ensure that Danish

participation in defense projects in Greenland was as great as possible and to allow Danish

concerns to participate more fully in the operation of support at Thule Air Base. AR 20zf-1467

to 1469.

In 1991, a Memorandum of Understanding between the two countries stated that “either

[p]arty may award contracts to commercial enterprises for goods and services, including

construction projects, in Greenland and may procure directly from any US or Danish

/Greenlandic source . . . .” Memorandum of Understanding Between the Government of the

United States of America and the Government of the Kingdom of Denmark (Including the Home

Rule Government of Greenland) Use of Sondrestrom Aviation Facility Kulusuk Airfield and

Other Matters Related to United States Military Activities in Greenland (“1991 MOU”), art. IV,

¶ 1, Mar. 13, 1991, T.I.A.S. No. 12285. During the years 2008 and 2009, the United States and

Danish governments collaborated to amend the 1991 MOU with the following text:

In accordance with their respective laws and regulations, either [p]arty may award

contracts to commercial enterprises for goods and services, including construction

projects, in Greenland, and

shall procure directly from Danish/Greenlandic

sources. When procurement from such sources is not feasible, U.S. requirements

may be satisfied by procurement from U.S. or other sources.

Either [p]arty may

use its own military or civilian personnel to perform services or construction

projects.

The Joint Statement was signed during the pendency of these consolidated cases and is

not part of the administrative record of the procurement.

See

Def.’s Opp’n to Pls.’ Mots. for

Prelim. Inj. App. at 50. It was provided by the government in connection with the court’s

consideration of equitable factors.

See id.

at 57-58. The Joint Statement is addressed in detail

infra,

at 19.

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AR 20z-1443 (Diplomatic Note (Jan. 27, 2009)) (emphasis added). The revision stated in the

Note replaced Article IV, paragraph one of the 1991 MOU and “constitute[d] an Agreement

between [the] two governments,” which entered into force on January 27, 2009.

See

AR 20z-

1443 to 1444;

see also

AR 147-11598 (Thule Base Maintenance Contract Recommendation)

(setting out the State Department’s acknowledgment that it was “bound by the . . . language from

our . . . diplomatic note to the Government of Denmark amending the language of Article IV of

the March 13, 1991 [MOU] between the United States and Denmark (including Greenland).”).

Consistent with these international agreements, officials from the Air Force and the State

Department entered into discussions with Danish Ministry of Finance officials during the Spring

of 2013 to determine whether offerors qualified as “Danish/Greenlandic sources” for the purpose

of a Thule Air Base solicitation.

See

AR 20c-673. As the two countries were negotiating the

eligibility requirements, the Danish Ministry of Foreign Affairs intimated that it would not make

the eligibility determination because of obligations with European Union procurement

regulations and it would likely recommend that the government of Greenland step in, since it is

not part of the European Union.

See

AR 147-11587 (E-mail from [***] to [***],

et al.

(Nov. 1,

2013)). This recommendation presented a conflict of interest, however, because the incumbent

contractor, Greenland Contractors, is partially owned by the government of Greenland.

See id.;

see also

AR 147-11606 (E-mail from Patrick King to [***] (Nov. 5, 2013)).

To avoid such a conflict, a State Department official at the United States Embassy in

Denmark suggested establishing a “simple, transparent checklist of requirements” that could be

used for making eligibility determinations. AR 147-11586 (E-mail from [***] to [***],

et al.

(Nov. 4, 2013)) (“If the involvement of the Greenlandic government really is a showstopper,

then we could look at an earlier [Air Force] concept of us establishing a simple, transparent

checklist of requirements for tender participation - company must have a headquarters in the

Kingdom, pay taxes in the Kingdom, bank in Kingdom, etc.”). After consulting with the Air

Force, the State Department prepared a draft memorandum setting forth proposed criteria for

eligibility:

- the primary bidder must be registered as a Danish company

with the Danish Business Authority — demonstrated by a CVR

number . . . and a listing within the Central Business Registry

identifying them within a legal category of Danish businesses

(not as a subsidiary of a foreign company);

- payable through a Danish bank account;

- maintaining a physical[] presence in the Kingdom of Denmark.

AR 147-11600.

“CVR” is an acronym for “Det Central Virksomhedsregister.” “The Central Business

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During this time and in furtherance of its proposal to create a “simple, transparent,

checklist of requirements,” AR 147-11586, a State Department officer, [***], sent an e-mail to

the contracting officer, Patrick King, regarding the requirements for conducting business in

Denmark, AR 20f-873 (E-mail from [***] to [***], King, and Major John Schoonmaker (Nov. 4,

2013)). Mr. [***] informed Mr. King that “[i]n the searchable part of the CVR there is an

information point called ‘type of company/virksomhedsform’ that has ‘subsidiary of foreign

company’ as a possibility, so

there is a way to see if the company is fully registered as Danish or

acting as a foreign subsidiary in Denmark.” Id.

(emphasis added).

Accordingly, the United

States government was under the belief, later proved to be mistaken, that registering in the CVR

would permit the Air Force to determine whether an offeror was genuinely a Danish or

Greenlandic entity or was merely acting as a subsidiary of a foreign company.

On November 25, 2013, the Danish Ministry of Foreign Affairs proposed criteria that

would limit eligibility to Greenlandic companies: namely, “the enterprise [must be] registered

. . . under the legislation applying to Greenland . . . [, t]he registered office of the enterprise

[must] be in Greenland and the management of the [contract] [must] be performed in Greenland

. . . [, and] [t]he enterprise [must] abide by the labour laws in Greenland.” AR 147-11632

(Criteria for Greenlandic Enterprise). In response, the State Department indicated that limiting

competition to Greenlandic enterprises was a “departure from the status quo and beyond what [it

has] committed in [the] MOU with Denmark.” AR 147-11631 (E-mail from [***] to [***],

et al.

(Nov. 25, 2013));

see also

AR 147-11620 (E-mail from Esther McClure to Robert Borchert and

John Culton (Nov. 8, 2013)) (quoting statement from Danish General Jorgen Jacobson that “[w]e

want to keep the status quo concerning the spirit of the 1951 [A]greement”); AR 147-11613 (E-

mail from [***] to Nauja Bianco (Nov. 7, 2013)) (reiterating the United States’ “commit[ment]

to sourcing from Danish/Greenlandic sources as stated in [the] MOU and [that it was] willing to

adjust whatever mechanism and criteria Denmark and Greenland determine[d] [we]re most

appropriate for defining these sources”).

regardless of economic and organizational structure. [The] CVR also covers both public and

private businesses.” AR 20f-873.

Mr. [***] is stationed at the United States Embassy in Denmark.

See

AR 251-28251

(Copenhagen Arctic’s Response to Air Force Mem. of Law in the proceedings before GAO)

(citing a LinkedIn Biography of Mr. [***]). Greenland Contractors contends that when looking

into whether the CVR could identify a company as a subsidiary of a foreign company, Mr. [***]

“mistranslated the word ‘filial’ in Danish to mean ‘subsidiary,’ when that word in fact means

‘branch’ or ‘branch official.’” Mem. of Greenland Contractors in Support of Its Mot. for

Judgment on the Admin. Record (“Greenland Contractors’ Mot.”) at 12, ECF No. 62-1;

see also

Copenhagen Arctic’s Mot. for Judgment and Supporting Mem. on the Admin. Record

(“Copenhagen Arctic’s Mot.”) at 17-18, ECF No. 61 (stating that two options available on the

CVR form were: (1) “‘[f]ilialer af udenlandske aktieselskaber’ (in English: [b]ranch of a foreign

owned public limited company);” and (2) “‘[f]ilialer af udenlandske anpartsselskaber’ (in

English: [b]ranch of a foreign owned private limited company).”);

compare

http://en.bab.la

/dictionary/danish-english/filial (translating the Danish word “filial” to “branch” in English),

with

http://en.bab.la/dictionary/english-danish/subsidiary (translating the English word

“subsidiary” to “datterselskab” in Danish).

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During a meeting held on December 2, 2013, the two countries ultimately settled on

eligibility criteria to be used in a solicitation for Thule Air Base.

See

AR 20g-874 (Letter from

Kim Jørgensen to the United States Embassy in Copenhagen (Dec. 9, 2013)). The agreed

language was memorialized in a letter dated December 9, 2013 from the Danish Ministry of

Foreign Affairs to United States Ambassador J. Rufus Gifford.

See

AR 20g-874 to 875 (“2013

Diplomatic Note”);

see also

AR 20h-888 (Letter from Gifford to Jørgensen (Dec. 13, 2013)).

The 2013 Diplomatic Note acknowledged that the “strong wish of the United States [was] not to

further limit the number of companies eligible to participate in the procurement.” AR 20g-874.

Accordingly, Danish companies would not be excluded from the competition and it “[would]

hence be for the United States to assess whether a company qualifies as Danish or Greenlandic

based on predefined criteria.”

Id.

These criteria required an offeror to produce a signed letter

from an officer of a bank within Denmark verifying that the company conducts business with

that institution and to submit a corporate certificate verifying that the company is registered as a

business in Denmark. AR 20g-874 to 875. The letter expressly stated that “THE ENTERPRISE

. . . SHALL NOT BE REGISTERED AS A SUBSIDIARY OF [A] FOREIGN COMPANY.”

AR 20g-875 (emphasis in original).

The underlying purpose of the criteria “[wa]s to ensure Greenland and Greenlandic

society greatest possible benefits from the agreement.” AR 20g-874;

see also

Per Aarsleff’s

Compl. Attach. D (Decl. of Amb. Jonas Bering Liisberg (“Liisberg Decl.”), ¶ 24 (Mar. 2, 2015)).

The Under-Secretary for Legal Affairs in Denmark, Ambassador Liisberg,

has confirmed the

Danish government’s understanding that these eligibility criteria “notif[ied] all interested

offerors that the

Thule Contract could not be lawfully awarded to a registered Danish company

owned and controlled by a foreign company.”

Liisberg Decl. ¶ 25 (emphasis added);

see also

AR 8-548 (Decl. of Carlo Mosca (Dec. 14,

2014)) (stating the administrative contracting officer’s acknowledgement that “I do not speak

Danish and I am not versed in our treaty obligations under international law. As a result, I

determined it was appropriate to rely upon the language provided to [me] by the Danish

government for inclusion in the RFP without altering it.”). As set forth in Section L-6 of the

“In [his] role as Under-Secretary for Legal Affairs, [Ambassador Liisberg] advise[s] the

Minister for Foreign Affairs of Denmark on legal matters.” Liisberg Decl. ¶ 1.

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draft solicitation, responsive proposals were required to include:

2) Corporation certificate (Selskabscertifikat m. oblat) verifying

that your company is registered as a business in the Kingdom of

Denmark. (Det Central Virksomhedsregister (CVR); Det

Grønlandske Erhervsregister (GER); Skráseting Føroya (Skrás.

Nr.))

NOTE: THE REGISTERED OFFICE OF THE ENTERPRISE

SHALL BE IN THE KINGDOM OF DENMARK AND SHALL

NOT BE REGISTERED AS A SUBSIDIARY OF FOREIGN

COMPANY.

3) Signed letter from an officer of a bank within the Kingdom of

Denmark verifying that your company conducts business with that

institution.

NOTE: ELECTRONIC FUNDS TRANSFER OF INVOICE

PAYMENTS WILL ONLY BE MADE TO A BANK IN THE

KINGDOM OF DENMARK.

AR 75-4162;

see also

AR 75-4155 (setting out Section L-3 of the draft solicitation, limiting

“participation in this acquisition . . . to Danish/Greenlandic enterprises.”).

Prospective offerors responded with questions to the Air Force regarding the eligibility

requirements. On December 10, 2013, the Air Force received the following inquiry: “What do

you mean by ‘not be registered’?” AR 20e-826 (Draft RFP Question and Answer (“RFP

Q&A”)). Relying solely on the e-mail from an official with the State Department,

see supra,

7, and without taking steps to verify the accuracy of the statement in the e-mail, the Air Force

posted an answer stating that “[i]n the searchable part of the CVR there is an information point

called ‘type of company/virksomhedsform’ that has ‘subsidiary of foreign company’ as a

possibility, so there is a way to see if the company is fully registered as Danish or acting as a

foreign subsidiary in Denmark.”

See

AR 20e-826 (RFP Q&A);

see also

AR 20c-674. On

January 28, 2014, a prospective offeror requested that the Air Force “provide further clarification

as to what a ‘Danish Enterprise’ is as will be interpreted by the US Air Force.” AR 20e-827

(RFP Q&A). The Air Force responded that “[t]o be eligible for award, an offeror must present:

[the documents set forth in Section L-6 of the draft solicitation].”

Id.

Finally, on February 13,

2014, Exelis Services’ initial Danish teaming partner, Danbor A/S (“Danbor”), posed the

following question:

If the Danish registered company is owned by a foreign company

but still can provide following:

1. Corporate certificate ver[i]fying that your company is

regist[e]red as a business in the Kingdom of Denmark[;]

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2. Signed letter from an officer of a bank within the [K]ingdom of

Denmark verifying that your company conducts business with

that institution[; and]

3. In the CVR register your company is registered as a A/S

(limited company)[;]

Will [that company,] based on above[,] be eligible for award?

AR 271-2873 (Danbor Question and Answer (“Danbor Q&A”) (Feb. 13, 2014)) (emphasis

added).

The Air Force did not answer this inquiry in the affirmative, but instead it again copied

the eligibility requirements from Section L-6 of the draft solicitation.

See id.

Together, these

responses show the Air Force’s understanding that the CVR database would permit it to identify

companies “acting as a foreign subsidiary in Denmark,”

see

AR 20e-826 (RFP Q&A), so it could

exclude those entities from the procurement. Moreover, the Air Force’s response to Danbor

suggests that a “company . . . owned by a foreign company” would not meet the RFP’s

requirement even if it was “registered as a [Danish company].”

See

AR 271-2873 (Danbor

Q&A).

Final solicitation.

On March 28, 2014, the Air Force issued RFP No. FA2523-12-R-0006 to obtain

operation, support, and maintenance services at Thule Air Base. The services include “supply

and purchasing, fuels management, airfield and airport operations, air traffic and transportation

management, water port operations, civil engineering operations, vehicle operations and

maintenance, fire protection, environmental management, health services, food services,

The Danbor Q&A was not part of the administrative record in the proceedings before

GAO. It was made part of the record in response to a letter from Per Aarsleff’s counsel dated

April 6, 2015, to the government’s counsel, requesting that the Air Force complete the

administrative record.

See

Per Aarsleff’s Mot. for Judgment on the Admin. Record and Request

for Permanent Inj. (“Per Aarsleff’s Mot.”) Ex. A, at 2, ECF No. 60 (Letter from William Rayel

to Paul Debolt (Apr. 10, 2015)). According to the Air Force, it had “inadvertently failed to post

[the Danbor Q&A] with the other questions and answers . . . [even though it was] the Air Force’s

final answer.”

Id.

The Air Force’s acquisition plan prepared prior to the issuance of the RFP, but

approved on March 3, 2014, further indicates that the eligibility criteria were intended to exclude

non-Danish and non-Greenlandic firms.

See

AR 20zg-1501 (“Market research . . . indicates that

capable Danish/Greenlandic sources exist for the subject requirement; therefore,

this acquisition

will be limited to Danish/Greenlandic sources.”)

(emphasis added); AR 20zg-1521 (“Non-

Danish or non-Greenlandic firms (less than 49% ownership)

interested in subcontracting or joint

ventures opportunities have been encouraged to contact potential Danish or Greenlandic prime

contractors that may be interested in participating in this requirement.”) (emphasis added);

see

also

AR 83-4600, 4669.

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recreation and community services, and non-sensitive communication management.” AR 88-

5143. The statutory authority for the Solicitation included 10 U.S.C. § 2304(c)(4), limiting

competition because of an international agreement,

as implemented by provisions of the

Federal Acquisition Regulations (“FAR”).

See

48 C.F.R. [“FAR”] § 6.302-4.

Subsection 2304(c) of Title 10 of the United States Code provides in part:

competitive procedures only when . . .

(4) the terms of an international agreement or a treaty between the

United States and a foreign government or international

organization, or the written directions of a foreign government

reimbursing the agency for the cost of the procurement of the

property or services for such government, have the effect of

requiring the use of procedures other than competitive

procedures[.]

10 U.S.C. § 2304(c).

FAR § 6.302-4 states, in relevant part:

(a) Authority. . . .

(2) Full and open competition need not be provided for

when precluded by the terms of an international agreement

or a treaty between the United States and a foreign

government or international organization, or the written

directions of a foreign government reimbursing the agency

for the cost of the acquisition of the supplies or services for

such government.

(b) Application. This authority may be used in circumstances such

as—

(1) When a contemplated acquisition is to be reimbursed by

a foreign country that requires that the product be obtained

from a particular firm as specified in official written

direction such as a Letter of Offer and Acceptance; or

(2) When a contemplated acquisition is for services to be

performed, or supplies to be used, in the sovereign territory

of another country and the terms of a treaty or agreement

specify or limit the sources to be solicited.

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The RFP sought a hybrid firm-fixed-price contract, comprising economic-price-

adjustment and cost-reimbursable contract line items to be awarded on a low-price, technically

acceptable (“LPTA”) basis, as governed by FAR Part 15, Contracting by Negotiation.

See

88-5143, 5251;

see also

FAR §§ 15.000-.609. Regarding technical acceptability, the RFP

provided that an offeror was required to be acceptable under the following seven technical sub-

factors: (1) program management; (2) infrastructure operation and maintenance plan;

(3) logistics plan; (4) vehicle/equipment replacement plan; (5) resource utilization plan;

(6) downward pricing; and (7) experience. AR 88-5256 to 5258. An unacceptable rating under

any one of the sub-factors would result in an offeror’s proposal being rated technically

unacceptable.

See

AR 88-5261 to 5262. The RFP further stated that an offeror’s proposed price

had to be “reasonable, affordable[,] and balanced,” pursuant to the price-analysis techniques

outlined in FAR § 15.404-1. AR 88-5265;

see also

FAR § 15.404-1 (titled “Proposal analysis

techniques”). In Section M of the RFP, offerors were also “advised to

clearly show justification

for unique practices that significantly lower pricing.”

AR 88-5265 (emphasis added). They

were warned that “[a]n assessment that the proposal is not reasonable or affordable w[ould]

result in the offer being unacceptable for award.”

Id.

The eligibility criteria remained the same as those requirements recited in the draft

solicitation:

L-3. OFFEROR ELIGIBILITY

Participation in this acquisition is limited to Danish/Greenlandic

enterprises. Enterprises must possess a corporation certificate

(Selskabscertifikat m. oblat) verifying the company is registered as

a business in the Kingdom of Denmark (Det Central

Virksomhedsregister (CVR); Det Grønlandske Erhervsregister

(GER); Skráseting Føroya (Skrás. Nr.)). NOTE: THE

REGISTERED OFFICE OF THE ENTERPRISE SHALL BE IN

THE KINGDOM OF DENMARK AND SHALL NOT BE

REGISTERED AS A SUBSIDIARY OF FOREIGN COMPANY.

Enterprises must produce a signed letter from an officer of a bank

within the Kingdom of Denmark verifying the company conducts

business with that institution. NOTE: ELECTRONIC FUNDS

TRANSFER OF INVOICE PAYMENTS WILL ONLY BE

MADE TO A BANK IN THE KINGDOM OF DENMARK.

AR 88-5252 to 5253 (emphasis in original). Those criteria were restated in Section L-6 of the

RFP, which provided:

FAR § 6.302-4(a), (b);

see also Hyperion, Inc. v. United States,

120 Fed. Cl. 504, 511-14 (2015)

(giving effect to the “International Agreement” exception to the Competition in Contracting Act,

10 U.S.C. § 2304(c)(4), and FAR § 6.302-4).

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L-6. INFORMATION TO OFFERORS (ITO) AND

INSTRUCTIONS FOR PROPOSAL PREPARATION . . .

(IPP) . . .

b. Contract Documents.

As part of the proposal submission,

include the following . . .

2) Corporation certificate (Selskabscertifikat m. oblat) verifying

that your company is registered as a business in the Kingdom of

Denmark. (Det Central Virksomhedsregister (CVR); Det

Grønlandske Erhervsregister (GER); Skráseting Føroya (Skrás.

Nr.))

NOTE: THE REGISTERED OFFICE OF THE ENTERPRISE

SHALL BE IN THE KINGDOM OF DENMARK AND SHALL

NOT BE REGISTERED AS A SUBSIDIARY OF FOREIGN

COMPANY.

3) Signed letter from an officer of a bank within the Kingdom of

Denmark verifying that your company conducts business with that

institution.

NOTE: ELECTRONIC FUNDS TRANSFER OF INVOICE

PAYMENTS WILL ONLY BE MADE TO A BANK IN THE

KINGDOM OF DENMARK.

AR 88-5253, 5259 (emphasis in original). Also, Section L of the Solicitation included a

provision governing staffing. There, the Solicitation explained that in accordance with

agreements between the United States and the Kingdom of Denmark, “personnel working at

Thule [Air Base] must be Danish, Greenlandic or American citizens, and must adhere to

Danish/Greenlandic labor law.” AR 88-5257.

Of further relevance in this bid protest, a provision of the Performance Work Statement

(“PWS”) was incorporated in Section H-6 of the Solicitation, which read as follows:

H-6. STATUTORY RESTRICTIONS ON FOREIGN

ACQUISITIONS

The requirements at PWS 3.1.16 to maximize and document

contract related purchases and subcontracts for Danish and

Greenlandic sources required by the 1962 International Agreement

(Aide Memoire) between the US and Denmark take precedence in

the performance of this contract. Products not acquired by Danish

and/or Greenlandic sources must be procured [in accordance with]

the following FAR/[Defense Federal Acquisition Regulation

Supplement (‘DFARS’)] clauses if applicable:

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Procurement of Biobased Products shall utilize FAR CLAUSE

52.223-2. The Contractor shall notify the Contracting Officer when

purchase of Biobased products cannot be acquired from U.S.

sources as and when needed in a satisfactory quality and sufficient

quantity at market prices and take action in accordance with the

Contracting Officer’s direction.

The Contractor agrees to deliver to the Government items that

comply with the requirements of [DFARS] clauses 252.225-7012,

and 252.225-7030 in Section I of this contract.

Delivery is defined as transfer of title from the contractor to the

Government or incorporation of Contractor-owned material or

parts into Government-owned property.

AR 88-5227 to 5228 (emphasis in original);

see also

AR 88-5279 (setting out PWS 3.1.16, as

incorporated into Section H of the RFP, requiring a contractor to “[m]aximize

and document

contract-related purchases and

subcontracts from Danish and Greenlandic sources”

and to

“document

and justify any exceptions”)

(emphasis added).

While maximizing Danish and

Greenlandic subcontracts “t[ook] precedence in the performance of [the Thule C]ontract,” AR

88-5279, “[n]on-Danish or non-Greenlandic firms interested in subcontracting or joint venture[]

opportunities [were nevertheless] encouraged to contact potential Danish or Greenlandic prime

contractors,” AR 54-2912 (Solicitation Synopsis (created May 16, 2012 and modified Mar. 19,

2013));

see also

AR 20zg-1521.

Evaluation of Offers

Offerors.

Four offerors—Exelis Services, Per Aarsleff, Greenland Contractors, and Copenhagen

Arctic—submitted timely proposals in response to the Solicitation.

See

AR 20u-1419 (Source

Selection Decision Document (Oct. 21, 2014)). Greenland Contractors is registered as a Danish

partnership,

i.e.,

an “Interessentskab” or “I/S,” and is owned in part by the government of

Greenland.

See

Prelim. Inj. Hr’g Tr. 61:13-16. Greenland Contractors is the current contractor

for Thule Air Base operation and maintenance, and it has been the incumbent contractor for the

base since 1972. Greenland Contractors’ Compl. ¶ 10. Each of the other offerors, Per Aarsleff,

Copenhagen Arctic, and Exelis Services, is registered as a Danish limited company,

i.e.,

“Aktieselskab” or “A/S.”

See

AR 20s-1280 (Legal Registration Certificate for Exelis Services

(Apr. 29, 2014));

see also

AR 20zh-1525 (Mem. from René Streander to King (May 11, 2014));

see also

Def.’s Opp’n to Mots. for Prelim. Inj. at 13. Exelis Services was established in

Denmark in April 2014, Copenhagen Arctic was established in March 2014, and Per Aarsleff

The language of the 1962 Aide Memoire was not incorporated directly into the

solicitation,

see

AR 20c-674, but the Aide Memoire was acknowledged in Section H-6,

see

88-5227, as guiding a performance requirement concerning “[m]aximiz[ing] . . . contract-related

purchases and subcontracts from Danish and Greenlandic sources,”

id.

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was established in December 1961. AR 20zh-1525.

For the purposes of this procurement, Per

Aarsleff listed an American company, [***], as a subcontractor,

see

AR 98-6449 to 6450 (Mem.

to King Regarding Contracting Squadron (May 11, 2014)), and Copenhagen Arctic’s proposal

included the United States-based entity, [***], AR 168-14312, 14319 (Presentation of

Copenhagen Arctic and Partners).

Although a Danish-registered enterprise, Exelis Services is a wholly-owned subsidiary of

Vectrus Systems Corporation (formerly known as Exelis Systems Corporation) (“Vectrus”), a

United States-based company.

See

Rule 7.1 Disclosure Statement of Def.-Intervenor Exelis

Services, ECF No. 20 (No. 15-215) (certifying that “Vectrus Systems Corporation is Exelis

Services A/S’ sole corporate parent, owning 100% of its stock”);

see also

AR 251-28526 (Notice

of Award (Oct. 31, 2014)) (“On October 31, 2014, a Danish company owned by Vectrus was

awarded a $411M base maintenance contract. . . . Work will be performed at Thule Air Base,

Greenland and is expected to be complete by September 30, 2022.”).

In addition, the

administrative record manifestly shows that the Air Force was aware of Exelis Services’ status as

a foreign subsidiary when making the award decision.

See, e.g.,

AR 145-11033 (Letter from

[***], general counsel for Exelis Systems Corporation, to King (June 16, 2014)) (stating in a

letter to the contracting officer that Exelis Services is “a wholly-owned subsidiary of [Vectrus]

Systems Corporation”); AR 21e-2216 (Letter from Streander to Exelis Services (Sept. 17, 2014))

(reciting the Air Force’s acknowledgement of “the delivery/receipt of [Vectrus] Systems

Corporation’s submission for Thule [Air] Base Maintenance Contract.”); AR 142-10808 (setting

out the Defense Contract Management Agency’s report stating that “Exelis Services A/S was

established in April 2014 and is a wholly-owned subsidiary of Vectrus Systems Corporation

(legacy Exelis Systems Corporation)”); AR 145-11105 to 11106, 11110 (Vectrus, Inc. Form 8-K

(Oct. 31, 2014)) (posting a request from [***] of Vectrus that the contracting officer approve a

draft of the company’s Securities and Exchange Commission Form 8-K, which stated that “[o]n

“Copenhagen Arctic is a Joint Venture (JV) established by the Danish company

Copenhagen Group and U.S.-based DynCorp International for the sole purpose of tendering for

the operation and maintenance of the Thule AB, Greenland for the USAF’s Space Command/

21st Space Wing/821st Air Base Group.” AR 168-14312. Specifically, DynCorp has a thirty

percent ownership in Copenhagen Arctic.

See

Defendant-Intervenor Exelis Services’ Cross-Mot.

for Judgment on the Admin. Record (“Exelis Services’ Cross-Mot.”), at 3, ECF No. 65-1;

see

also

Copenhagen Arctic A/S’s Rebuttal Mem. in Support of Judgment on the Admin. Record

(“Copenhagen Arctic’s Reply”) at 17, ECF No. 67.

Vectrus is headquartered in Colorado Springs, Colorado and is the former Exelis

Systems Corporation. In September 2014, “Exelis Systems Corporation was part of a spin-off

from its parent company, Exelis, Inc. and was renamed Vectrus Systems Corporation.” AR 142-

10808 (Defense Contract Management Agency Financial Capability Review (Oct. 2014)). “The

ownership interest of Vectrus Systems Corporation in Exelis Services A/S remained the same

after the spinoff.”

Id.

“Exelis Services kept the Air Force apprised of these changes

during the procurement process.” Exelis Services’ Cross-Mot. at 22 n.9 (citing AR 21c-1550 to

1552 (Letter from [***] to King (Sept. 16, 2014))).

For the purposes of this opinion, the court will refer to Exelis Services’ current parent

company as Vectrus.

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October 31, 2014, Vectrus received notice of award of a $411M . . . Thule [Air] Base

Maintenance Contract”).

Evaluations.

All four proposals were initially evaluated as technically unacceptable in varying degrees

due to defects related to technical sub-factors, but each was nevertheless included in the

competitive range.

See

AR 103-6903-16 (Initial Evaluation Report (June 3, 2014)). The Air

Force issued 85 Evaluation Notices (“ENs”) to Copenhagen Arctic, 83 ENs to Exelis Services,

82 ENs to Per Aarsleff, and 54 ENs to Greenland Contractors, AR 20c-677;

see also

AR 20i-912

(Overall Evaluation Summary), and undertook oral discussions with all four offerors “to ensure

complete understanding of the evaluator’s concerns,” AR 20c-677;

see also

AR 20k-1050 to

1057 (Letters Initiating Discussions with Offerors (June 13, 2014)). As a result of discussions,

the Air Force found Greenland Contractors’ proposal to be technically acceptable, while the

other three proposals remained technically unacceptable.

See

AR 20m-1161 (Evaluation

Summary after Discussions (July 2014)). Thereafter, the Air Force held a second round of

discussions, after which it found all four proposals to be technically acceptable.

See

AR 20c-677

to 678. The Air Force then requested Final Proposal Revisions. AR 20c-678.

During the evaluation stage of the procurement, an Air Force contract specialist contacted

the Danish Ministry of Foreign Affairs for assistance in determining whether the four offerors

“[could] be considered Danish Firms and not a subsidiary of a foreign firm.” AR 20g-878 to 879

(E-mail from Streander to Ulrik Petersen (July 30, 2014)). The Danish Ministry of Foreign

Affairs declined to “assist [the Air Force] in the assessment of the companies in question,”

stating that the purpose of the agreed-upon criteria was to “simplify and streamline the

procedure” for determining eligibility and for the United States to determine eligibility based

upon “concrete, prior defined criteria[].” AR 20g-878 (E-mail from Petersen to Streander (July

30, 2014)).

The Air Force subsequently sought assistance in this matter from the Danish

Business Authority, whose response illuminates the salient issue in this case.

In an e-mail

The Air Force contacted the Danish Ministry of Foreign Affairs again in fall of 2014

and the Ministry responded by reiterating the eligibility criteria and asserting that “these criteria

give[] the US authorities the full competence in this matter and hence, leave Danish authorities,

including [t]he [Danish Ministry of Foreign Affairs], [t]he Ministry of Business and Growth[,]

and [t]he [Danish Business Authority] out of the qualification process.” AR 20g-886 (E-mail

from Peter Larsen to King (Sept. 24, 2014)).

Greenland Contractors has provided a translation of the initial e-mail sent to the Danish

Business Authority which reads, in pertinent part:

Attached please find four CVR reports/certificates on four

companies that are all understood to be Danish companies.

Are you permitted to or are you able to help by confirming that

they are in actual fact considered to be Danish companies and

not

subsidiaries of foreign companies?

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dated August 6, 2014, the Danish Business Authority acknowledged that the Air Force had

transmitted “[two] complete reports for two limited companies (A/S) and two confirmation[s]

concerning two other companies, one limited company and one partnership (I/S).” AR 20g-883

(E-mail from Katia Tórsheim Voltelen to Streander (Aug. 6, 2014)). Importantly, the Danish

Business Authority stated that it “does[

not] register owners,

therefor[e] this [A]uthority cannot

shed light to w[hether] or not the companies are subsidiaries of foreign companies” and

suggested that the Air Force “try to look into the companies[’] yearly statements in regards to

ownership . . . [or] access the companies’ statements via www.cvr.dk.”

Id.

(emphasis added).

This communication thus informed the Air Force that the CVR could not be used to identify

foreign subsidiaries and that the Air Force was mistaken in advising potential offerors that “[i]n

the searchable part of the CVR . . .

there is a way to see if the company is fully registered as

Danish or acting as a foreign subsidiary in Denmark.” See

AR 20e-826 (RFP Q&A) (emphasis

added).

Despite this knowledge, there is no evidence in the record that the Air Force took

action to fix its mistake as it continued with the evaluations.

Following efforts by the Air Force to have Danish authorities provide guidance on the

eligibility criteria, all four offerors submitted Final Proposal Revisions by September 17, 2014.

AR 20c-678. To “ensure[] all offerors were still eligible for award . . . [the] CVR was checked

to verify that all [o]fferors were registered as a business in the Kingdom of Denmark,” and it was

found that “[a]ll [o]fferors . . . had offices that were legally registered as a business in the

Kingdom of Denmark.”

Id.

Not surprisingly, “[t]here was no information [in the CVR]

indicating that any offeror . . . had offices

registered

as subsidiaries of a foreign company.”

Id.

(emphasis added).

The Air Force ultimately concluded that all four offerors were eligible for

the contract award as Danish or Greenlandic enterprises and that all proposals were technically

acceptable.

I do not have experience enough to judge this and need your help.

It does look as if they are autonomous Danish companies.

Greenland Contractors’ Mot. at 13 (translating AR 20g-881 (E-mail from Streander to Benedicte

Schleimann (Aug. 5, 2014))) (emphasis added).

The government has now conceded that it was impossible to “register” as a foreign

subsidiary.

See

Def.’s Opp’n to Pls.’ Mots. for Prelim. Inj. at 22-23 (“The Air Force was

mistaken in its belief that there was a way to register as a ‘subsidiary of [a] foreign company’ in

the CVR . . . .”).

The Air Force’s contract specialist in Denmark was asked to ensure that the eligibility

criteria were satisfied and “ran every report possible in the CVR system and checked every

component within those reports; there was no indication that any [o]fferor had offices that were

registered as a subsidiary of a foreign company.” AR 20c-676, 681.

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Award.

Exelis Services submitted the lowest-priced proposal, offering to perform the work for

2,020,333,220 Danish kroners (code, “DKK,” symbol, “kr”) ($363,925,645), and it received the

award. AR 20c-678 to 679.

Per Aarsleff proposed the second-lowest price of DKK [***]

($[***]), Copenhagen Arctic proposed the third-lowest price of DKK [***] ($[***]), and

Greenland Contractors proposed the fourth-lowest price of DKK [***] ($[***]). AR 20c-678.

The three unsuccessful bidders were notified of the award decision on October 31, 2014, and

post-award debriefings were held on November 6 and 7, 2014. AR 20c-679.

Upon receiving the Thule Contract, Exelis Services immediately began the eight-month

process of transitioning, or “phasing-in,” its responsibilities at Thule Air Base.

See

AR 88-5153,

5217;

see also

Prelim. Inj. Hr’g Tr. 106:10 to 107:10. Exelis Services maintains that after

transition of the Thule Contract, it will “[***].”

See

Exelis Services’ Cross-Mot. at 22 (citing

Defendant-Intervenor Exelis Services A/S’ Opp’n to Pls.’ Per Aarsleff A/S’ and Greenland

Contractors I/S’ Mots. for Prelim. Inj. Attach. 1, ¶ 9 (Decl. of Karl Schmidt (Mar. 27, 2015))).

Exelis Services is scheduled to take over operation, maintenance, and support services from

Greenland Contractors on October 1, 2015. AR 88-5153. At that time, Exelis Services will be

responsible for full contract performance.

See

Prelim. Inj. Hr’g Tr. 60:16-19, 114:25-5. The Air

Force, however, has the ability under FAR § 52.217-8 to extend Greenland Contractors’ current

contract for a six-month period at the same rates and terms as the last contract year.

See

FAR §

52.217-8 (“The [g]overnment may require continued performance of any services within the

limits and at the rates specified in the contract. . . . The option provision may be exercised more

than once, but the total extension of performance hereunder shall not exceed 6 months.”);

see

also Magnum Opus Technologies, Inc. v. United States,

94 Fed. Cl. 512, 549 (2010) (examining

FAR § 52.217-8 in a bid protest based on a solicitation by the Air Force for contracts to supply

health care service providers).

Exelis Services’ proposal included: (1) a certificate from the Danish Business Authority

certifying Exelis Services as a legally registered public limited company in Denmark with a

report documenting its registration; and (2) a letter signed by a Danish bank confirming a

business relationship with Exelis Services and stating that the account was satisfactorily

maintained.

See generally

AR 20s (Exelis Services’ CVR Reports);

see also

AR 20za-1449

(Nordea Bank Danmark A/S Letter (Apr. 24, 2014)).

The offerors were required to submit their proposals in Danish kroners. AR 88-5223.

According to Exelis Services, it “appears clear that, had the Air Force awarded the

Thule Contract to Per Aarsleff, the Greenland Contractors’ . . . transition pool would have

become employees of [***]—a U.S. corporation—and performed the Thule [Contract] work as

[***] employees.” Exelis Services’ Cross-Mot. at 23. Additionally, Exelis Services avers that

had the Air Force awarded the Thule Contract to Copenhagen Arctic, those employees “[would]

become employees of [***].”

Id.

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Danish reaction.

In response to the award of the Thule Contract to a foreign subsidiary, the Danish

government expressed “concerns relating to the interpretation of international agreements

between the two governments pertaining to the definition of a Danish/Greenlandic enterprise.”

Def.’s Opp’n to Pls.’ Mots. for Prelim. Inj. App. at 50;

see also

Liisberg Decl. ¶ 48. Given the

diplomatic tension created by the award to Exelis Services, the United States government

recently negotiated a framework with the Danish government, reflected in the Joint Statement

issued in March 2015:

The United States and the Kingdom of Denmark are endeavoring

to address the concerns [regarding the award of the Thule

Contract] as follows:



The United States and the Kingdom of Denmark have established

an expert working group to develop a mutually acceptable

definition of a Danish/Greenlandic enterprise.



The U.S. Air Force intends to conduct a new acquisition and

issue a new request for proposals for the Thule Air Base

Maintenance Contract

once there is agreement between the United

States and the Kingdom of Denmark regarding what constitutes a

Danish/Greenlandic enterprise.



The U.S. Air Force intends then to competitively award a Thule

Air Base Maintenance Contract. The United States and the

Kingdom of Denmark will determine to what degree, if any,

competition will be limited.

Def.’s Opp’n to Pls.’ Mots. for Prelim. Inj. App. at 50 (emphasis added). The contemplation of a

re-competition in the procurement provides salient evidence that the Air Force committed a

fundamental error in awarding the Thule Contract to Exelis Services. The government

nonetheless emphasizes that “this [J]oint [S]tatement is not corrective action and does not render

these cases moot.” Def.’s Opp’n to Pls.’ Mots. for Prelim. Inj. at 58 n.24.

Protests at GAO

In November 2014, Per Aarsleff, Copenhagen Arctic, and Greenland Contractors filed

separate protests at GAO challenging the award to Exelis Services.

Although these protests

In accord with the Competition in Contracting Act (“CICA”), the Air Force suspended

Exelis Services’ performance while the protests were pending at GAO.

See

FAR § 33.104(c)(1)

(“When the agency receives notice of a protest from the GAO within 10 days after contract

award or within 5 days after a debriefing date offered to the protester for any debriefing that is

required by 15.505 or 15.506, whichever is later, the contracting officer shall immediately

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were not consolidated by GAO, on February 18, 2015, GAO issued one decision addressing all

three protests.

See

AR 37-2726 (GAO Decision);

Per Aarsleff,

2015 WL 1004252 (same).

The

primary ground considered by GAO in the protests was whether the contract to Exelis Services

“was unreasonable and did not meet the RFP requirements because the awardee is not a Danish

or Greenlandic company, but is rather a subsidiary of a foreign (United States) company.”

Per

Aarsleff,

2015 WL 1004252, at *5. All three protestors argued that Exelis Services was

incorporated in Denmark only shortly before proposal submissions and is a wholly-owned

subsidiary of Vectrus, a foreign company based in the United States.

See id.,

at *6. Based on the

“the treaty obligations between the United States and the Kingdom of Denmark,” the protestors

contended that “the awardee [was required] to be a Danish or Greenlandic firm, and that the Air

Force was therefore required to look beyond the issue of ‘registration’ and to investigate the

actual ownership of each offeror.”

Id.,

at *7.

GAO disagreed, holding that “the Air Force reasonably evaluated Exelis Services’

proposal, and reasonably found that Exelis Services was eligible for award under the terms of the

solicitation.” 2015 WL 1004252, at *9. GAO explained that the issue turned wholly on

registration

as a subsidiary, not whether the awardee actually was owned by a foreign, not

Danish, parent:

. . . [T]he RFP was clear on its face as to the issue of registration in

the CVR. Specifically, we agree with the Air Force and Exelis

Services

that the RFP’s eligibility analysis addressed whether the

offeror was registered as a subsidiary of a foreign company.

Apart

from the RFP’s language concerning registration, there are no

other criteria in the RFP that explain how the agency would

evaluate whether a firm was a Danish or Greenlandic enterprise.

Although the parties seek to add the issue of ownership or control

to the RFP, nothing in the solicitation provides for consideration of

these criteria.

Id.,

at *8 (emphasis added). Even if the language in the Solicitation created doubt as to how the

agency was planning to interpret the registration requirement, GAO concluded that any doubt

was clarified by the Air Force’s Q&A regarding the meaning of that criterion.

See id.

(“[The

agency’s] response clearly advised offerors that the Air Force believed that there was within the

CVR a place for a firm to indicate that a firm was a subsidiary of a foreign firm.”). Furthermore,

suspend performance or terminate the awarded contract . . . .”);

see also

AR 20c-672 (issuing a

stop work order to Exelis Services on November 13, 2014).

GAO did not consolidate the bid protests, which meant that the administrative records

provided in the respective proceedings were different.

See supra,

at 3 n.3. Due to protective

orders issued in the protests, only a two-page summary of the decision was initially released to

the public.

See

AR 37-2724 to 2725 (GAO Press Release (Feb. 18, 2015)). A redacted version

of the decision was later made available.

See Per Aarsleff A/S,

2015 WL 1004252;

see also

37-2722 (E-mail from Katherine Riback to Parties (Feb. 18, 2015)).

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GAO found that to the extent there was any ambiguity in the language of the Solicitation, it was

patent and the protests were therefore untimely.

See id.,

at *9 (“Where a patent ambiguity in a

solicitation is not challenged prior to the submission of bids, we will dismiss as untimely any

subsequent challenge to the meaning of the solicitation term.”) (citing 4 C.F.R. § 21.2(a)(1)

(“Protests based upon alleged improprieties in a solicitation which are apparent prior to bid

opening or the time set for receipt of initial proposals shall be filed prior to bid opening or the

time set for receipt of initial proposals . . . .”)).

GAO also rejected several other protest grounds asserted by the parties, including a

challenge by Greenland Contractors regarding the Air Force’s price evaluation.

See

2015 WL

1004252, at *13. Greenland Contractors had argued “that the Air Force failed to evaluate

whether Exelis Services’ proposed price was too low, and also argue[d] that the awardee’s low

price demonstrates that the awardee will not comply with Danish and Greenlandic labor law, as

required by the RFP.”

Id.

GAO found no merit in this argument because it “conclude[d] that the

solicitation did not require the Air Force to conduct a price realism evaluation.”

Id.,

at *14.

Although the price evaluation required offerors to “show justification for unique practices that

significantly lower pricing,” AR 88-5265, GAO “[did] not think that this statement obligated the

agency to evaluate the risk of poor performance stemming from a low price, in light of the

absence of a price realism factor in the solicitation,” 2015 WL 1004252, at *14.

Following the decision by GAO, the stay under CICA was lifted, and Exelis Services

resumed its phase-in activities pursuant to the Thule Contract.

See

Prelim. Inj. Hr’g Tr. 100:10-

21, 103:1 to 107:6.

Protests in this Court

Per Aarsleff, Greenland Contractors, and Copenhagen Arctic filed separate suits in this

court challenging the Air Force’s award of the Thule Contract to Exelis Services.

See

Per

Aarsleff’s Compl. in No. 15-215C ¶ 8; Greenland Contractors’ Compl. in No. 15-272 ¶ 8;

Copenhagen Arctic’s Compl. in No. 15-330 ¶ 1. Per Aarsleff filed the first complaint on March

3, 2015, and the next day the court granted a motion by Exelis Services to intervene. Order of

Mar. 4, 2015, ECF No. 12. The court set an accelerated briefing schedule to culminate in a

hearing scheduled for mid-May.

See

Scheduling Order of Mar. 4, 2015, ECF No. 13 (No. 15-

215). Per Aarsleff subsequently filed a motion for preliminary injunction on March 11, 2015,

see

Per Aarsleff’s Mot. for Prelim. Inj., ECF No. 23,

and Greenland Contractors followed with

its complaint and a motion for preliminary injunction on March 17, 2015,

see

Greenland

Contractors’ Motion for Prelim. Inj., ECF No. 6 (No. 15-272). The cases were consolidated,

see

Order of Mar. 20, 2015, ECF No. 19, and the court set a date for a hearing on the motions for a

preliminary injunction,

see

Amended Scheduling Order of Mar. 20, 2015, ECF No. 34. Shortly

Per Aarsleff did not initially request a preliminary injunction because “[it] was hopeful

that the [government] would agree to a voluntary stay of performance of Exelis Services’

contract.” Per Aarsleff’s Mot. for Prelim. Inj. at 2. When it did not receive any indication that

the government would agree to a voluntary stay, Per Aarsleff filed a motion for preliminary

injunction “to preserve the status quo” during the pendency of the litigation.

Id.

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thereafter, on March 31, 2015, Copenhagen Arctic filed its complaint. The hearing on Per

Aarsleff’s and Greenland Contractors’ motions for a preliminary injunction was held on April 2,

2015, and the court then consolidated the case in

Copenhagen Arctic

with the other recently

consolidated cases. On April 29, 2015, the court ordered that the disposition of the motions for

preliminary injunction be consolidated with the merits pursuant to RCFC 65(a)(2).

See

Order of

Apr. 29, 2015, ECF No. 64.

Consolidation was appropriate because (1) the court had

previously set an accelerated briefing and argument schedule; (2) the government had produced a

more thorough record than that available during the hearing on the motions for preliminary

injunction and in the three separate proceedings at GAO; and (3) the government had advised the

court that a short hiatus in acting on plaintiffs’ requests for injunctive or declaratory remedies

would not materially affect the government’s posture in the procurement itself.

See

Order of

Apr. 29, 2015.

Briefing on the motions for judgment on the administrative record has proceeded on an

accelerated basis. The administrative record was submitted and supplemented twice,

cross-

motions for judgment on the administrative record were received, briefing was completed on

May 19, 2015, and a hearing on the merits was held on May 22, 2015. Given the importance of

the contract at issue, the expedited schedule has allowed the court to reach a resolution of this bid

protest very promptly.

JURISDICTION

28 U.S.C. §1491(b)(1)

As an initial matter, this court has jurisdiction over bid protests pursuant to the Tucker

Act, 28 U.S.C. § 1491, as amended by the Administrative Dispute Resolution Act, Pub. L. No.

104-320, § 12, 110 Stat. 3870, 3874 (Oct. 19, 1996) (codified at 28 U.S.C. § 1491(b)). In

relevant part, the Tucker Act as amended vests this court with the juridical power to

RCFC 65(a)(2) provides:

Before or after beginning the hearing on a motion for a preliminary

injunction, the court may advance the trial on the merits and

consolidate it with the hearing. Even when consolidation is not

ordered, evidence that is received on the motion and that would be

admissible at trial becomes part of the trial record and need not be

repeated at trial.

RCFC 65(a)(2).

In this tripartite bid protest, the government has produced a more expansive

administrative record than that made available to GAO. The record here includes, among other

things, communications between the Air Force and the offerors that are relevant to this

procurement and were not available in conjunction with the proceedings that previously occurred

at GAO.

See, e.g.,

AR 271-2875 (Danbor Q&A);

see also

Def.’s Notice of Filing Amendment to

Admin. Record, ECF No. 59.

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render judgment on an action by an

interested party

objecting to a solicitation by

a [f]ederal agency for bids or proposals for a proposed contract or to a proposed

award or the award of a contract or any alleged violation of statute or regulation

in connection with a procurement or a proposed procurement.

28 U.S.C. § 1491(b)(1) (emphasis added);

see also Systems Application & Techs., Inc v.

United States,

691 F.3d 1374, 1380-81 (Fed. Cir. 2012) (“On its face, the statute grants

jurisdiction over objections to a solicitation, objections to a proposed award, objections to an

award, and objections related to a statutory or regulatory violation so long as these objections are

in connection with a procurement or proposed procurement.”).

The “Treaty Bar”

The government challenges this court’s subject matter jurisdiction, arguing that 28 U.S.C.

§ 1502 bars the court’s exercise of jurisdiction. 28 U.S.C. § 1502 is applicable to claims based

on treaties and provides:

Except as otherwise provided by Act of Congress, the United

States Court of Federal Claims

shall not have jurisdiction of any

claim

against the United States

growing out of

or dependent upon

any treaty

entered into with foreign nations.

28 U.S.C. § 1502 (emphasis added). “In enacting the predecessor of Section 1502, Congress

seems to have been concerned to prevent United States citizens from suing directly in the Court

of Claims to collect monies paid by foreign governments to the United States, under a treaty, in

discharge of a class of individual claims.”

S. N. T. Fratelli Gondrand v. United States,

166 Ct.

Cl. 473, 478 n.3 (1964) (citing

Great Western Ins. Co.

United States,

112 U.S. 193, 199-200

(1884)). According to its terms, this jurisdictional prohibition applies to a claim that is

“dependent upon and grows out of [a] treaty.”

United States v. Weld,

127 U.S. 51, 57 (1888)

(per Lamar, J.) (internal quotation marks omitted). In other words, “the right itself, which the

petition makes to be the foundation of the claim, must have its origin—derive its life and

existence—from some treaty stipulation.”

Id.

The Court of Claims has interpreted the term “treaty” to include “international executive

agreements,”

Hughes Aircraft Co. v. United States,

534 F.2d 889, 903 n.17 (Ct. Cl. 1976), and

that interpretation is binding upon this court.

“The reason for this [interpretation] is that the

The United States Constitution makes a distinction between “Treaties” and nontreaty

“Agreement[s]” or “Compact[s].”

Compare

U.S. Const. art. II, § 2, cl. 2 (“[The President] shall

have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two

thirds of the Senators present concur.”),

with id.

art. I, § 10, cl. 3 (“No State shall, without the

Consent of Congress . . . enter into any Agreement or Compact with another State, or with a

foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will

not admit of delay.”). Based on the work of eighteenth-century writer Emmerich de Vattel,

see

Emmerich de Vattel,

The Law of Nations

(London, printed for J. Newberry

et al.

1760), there is

evidence that “the Founders may have understood ‘Treaties’ to encompass ‘treaties of peace, of

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fundamental separation-of-powers policy underlying [§] 1502, i.e., to avoid undue judicial

interference (e.g., by construction of particular treaty terms and provisions) with the Executive

Branch’s conduct of foreign relations, is equally applicable to both forms of international

compact.”

Id.

The government contends that because plaintiffs’ allegations are dependent on an

international executive agreement,

i.e.,

the 1951 Defense of Greenland Agreement and the 1991

MOU (as amended by the 2009 Diplomatic Note), this court is divested of jurisdiction under 28

U.S.C. § 1502.

See

Def.’s Cross-Mot. for Judgment on the Admin. Record and Responses to

Pls.’ Mots. for Judgment on the Admin. Record (“Def.’s Cross-Mot.”) at 37-39, ECF No. 66;

see

also

Def.’s Reply to Pls.’ Opp’ns to Def.’s Cross-Mots. for Judgment on the Admin. Record

(“Def.’s Reply”) at 10, ECF No. 74. In the government’s view, plaintiffs have “explicitly

request[ed] that the [c]ourt construe the term ‘Danish/Greenlandic sources’ in the amendment to

the 1991 MOU to exclude subsidiaries of foreign companies.”

Id.

at 38. Accordingly, the

government contends that judicial interpretation of this international agreement “could affect the

current negotiations between the United States and Denmark. . . [, which] is exactly what Section

1502 is designed to avoid.”

Id.

Assuming that the amendment to the 1991 MOU forms an “international executive

agreement” or “treaty,” it is nonetheless appropriate to hear plaintiffs’ claims in these bid

protests because these claims neither directly nor proximately stem from an international

agreement.

See Weld,

127 U.S. at 57 (“[T]he statute contemplates a direct and proximate

connection between the treaty and the claim.”). Contrary to the government’s argument, the

court exercises its juridical power to construe the provisions in the Solicitation that were

explicitly drafted to satisfy and incorporate the international understanding. In this endeavor, the

court will look to the underlying agreements as a guide to interpreting the text of the Solicitation.

See Dalles Irrigation Dist. v. United States,

71 Fed. Cl. 344, 354 n.11 (2006) (“Because this is a

situation where the contract was entered to satisfy a statutory requirement . . . the interpretation

of the contract must be guided by an examination of the underlying statute.”);

see also

Copenhagen Arctic’s Mot. at 20.

But for the impact of the Air Force’s decisions which are alleged to be arbitrary or unlawful,

both parties would have had a “substantial chance” of being the awardee.

See Rex Serv. Corp.,

448 F.3d at 1308.

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State Farm Mut. Auto. Ins. Co.,

463 U.S. 29, 43 (1983)). “[T]he disappointed bidder bears a

heavy burden of showing that the award decision had no rational basis.”

Centech Grp.,

554 F.3d

at 1037 (internal citations and quotation marks omitted). In challenging an agency action on the

second ground, the disappointed bidder must establish “‘a clear and prejudicial violation of

applicable statutes or regulations.’”

Impresa Construzioni,

238 F.3d at 1333 (quoting

Kentron

Hawaii, Ltd. v. Warner,

480 F.2d 1166, 1169 (D.C. Cir. 1973)).

ANALYSIS

Eligibility

The terms of the Solicitation.

As previously emphasized, the Solicitation specified that “[p]articipation in this

acquisition is limited to Danish/Greenlandic enterprises.” AR 88-5252. The primary dispute in

this litigation turns on what was meant by Danish-Greenlandic enterprises and specifically on the

meaning and interpretation of the phrase, “THE ENTERPRISE . . . SHALL NOT BE

REGISTERED AS A SUBSIDIARY OF [A] FOREIGN COMPANY,” found in Sections L-3

and L-6 of the Solicitation.

See

AR 88-5252, 5259 (emphasis in original). This restrictive

phrase focuses on an enterprise organized as a company rather than under a different economic

and organizational structure,

e.g.,

as a partnership, sole proprietorship, association, joint venture,

or cooperative. That focus is perhaps understandable from a practical perspective, because the

procuring authority would expect that the corporate form would be employed by enterprises

large enough to compete for a contract as substantial as the one at hand. In all events, Danish

corporate law is at issue.

The government insists that the eligibility restriction concerned the issue of registration

and that its intent was to ensure that offerors were fully “registered as Danish” by excluding

entities specifically “registered

as”

a subsidiary of a foreign company.

See

Def.’s Cross-Mot. at

17-26;

see also

Exelis Services’ Cross-Mot. at 31-34. The plaintiffs disagree, arguing that the

restrictive language of Section L should be interpreted as being about foreign ownership rather

than registration.

See, e.g.,

Per Aarsleff’s Mot. at 11-17. Under plaintiffs’ interpretation, any

subsidiary of a foreign company

would not qualify as an eligible Danish or Greenlandic

enterprise under the RFP.

See, e.g.,

Greenland Contractors’ Mot. at 8-11.

Pursuant to the canons of contract interpretation, this court “must consider the solicitation

as a whole, interpreting it in a manner that harmonizes and gives reasonable meaning to all of its

provisions.”

Banknote Corp. of Am. v. United States,

365 F.3d 1345, 1353 (Fed. Cir. 2004);

see

also Dalton v. Cessna Aircraft Co.,

98 F.3d 1298, 1305 (Fed. Cir. 1996) (“We read the language

of a particular contractual provision in the context of the entire agreement . . . and construe the

contract so as not to render portions of it meaningless . . .”) (citing

Fortec Constructors v. United

States,

760 F.2d 1288, 1292 (Fed. Cir. 1985);

United States v. Johnson Controls, Inc.,

713 F.2d

1541, 1555 (Fed. Cir. 1983)). “An interpretation that gives meaning to all parts of the contract is

to be preferred over one that leaves a portion of the contract useless, inexplicable, void, or

superfluous.”

NVT Techs., Inc. v. United States,

370 F.3d 1153, 1159 (Fed. Cir. 2004) (citing

Gould, Inc. v. United States,

935 F.2d 1271, 1274 (Fed. Cir. 1991));

see also

Def.’s Cross-Mot. at 29 (“[T]here is not, in fact, a way to register as a ‘subsidiary of

[a] foreign company.’”). The court will not sanction such an unreasonable outcome.

See Perry

& Wallis, Inc. v. United States,

427 F.2d 722, 726 (Ct. Cl. 1970) (“[I]f plaintiff’s interpretation

of the contract is followed literally, it could lead to extremely unreasonable results. . . . Any

interpretation of the contract that would sanction such a result would be patently unreasonable.”).

Some recasting of the language in the Solicitation is necessary due to the defect in the

eligibility criteria stated in Sections L-3 and L-6. In that respect, the court strongly prefers to

excise the mistaken words, preserving the remainder of the text and comporting with the evident

intent of the procuring agency to implement the pertinent bilateral agreements.

Cf. Hibbs v.

Winn,

542 U.S. 88, 89 (2004) (discussing the cardinal rule against superfluities);

see also

AR 20g-879. These communications

confirm that the Air Force was concerned with the issue of foreign ownership and intended to

exclude foreign subsidiaries from eligibility.

Yet, the effect of adopting the government’s

proffered construction would be to read the foreign ownership restriction out of the Solicitation

altogether. Such a reading would be impermissible.

See Roschen v. Ward,

279 U.S. 337, 339

(1929) (Holmes, J.) (“[T]here is no canon against using common sense in construing laws as

saying what they obviously mean.”);

cf. United States v. Fisher,

6 U.S. (2 Cranch) 358, 386

(1805) (Marshall, C.J.) (“Where the mind labours to discover the design of the legislature, it

seizes every thing from which aid can be derived.”) (looking to the title of an act as an aid to

construction).

Exelis Services diverges from the government’s interpretative contentions and argues

that the intent of the eligibility criterion was to preclude offerors registered as a

branch

of a

foreign company.

See

Exelis Services’ Cross-Mot. at 13-21;

see also

Def.-Intervenor Exelis

Services A/S’s Reply in Support of its Cross-Mot. for Judgment on the Admin. Record and

Opp’n and Response to Pls.’ Replies to the Def.’s and Def.-Intervenor’s Cross-Mots. for

Judgment on the Admin. Record (“Exelis Services’ Reply”) at 12-18, ECF No. 75. Exelis

Services avers that “the record is clear that the crux of the eligibility criteria was, and always has

been, premised on

registration.”

Exelis Services’ Cross-Mot. at 13 (emphasis in original).

Exelis Services deals with the mistake in translation by averring that the Solicitation containing

the phrase “not registered as

subsidiary

of [a] foreign company,” AR 88-5252 to 5253, 5257

(emphasis added), erroneously referred to “subsidiary” instead of a “branch” of a foreign

company. Exelis Services’ Cross-Mot. at 20. Because Exelis Services is a registered Danish

company,

i.e.,

an A/S, and not a branch of a foreign company, it contends that “the outcome

simply would not have been different if the mistake [in translation] had not occurred.”

Id.

While creative, this argument is untethered to the administrative record before the court.

See

Combined Reply of Greenland Contractors I/S in Support of Its Mot. For Judgment on the

Admin. Record and in Opp’n to Def.’s and Intervenor’s Cross-Mots. (“Greenland Contractors’

Reply”) at 6 n.3, ECF No. 69. First, Exelis Services’ argument contradicts the position of the

Air Force during the protests before GAO.

See

Copenhagen Arctic’s Reply at 3. There, the

Air Force was asked in a set of interrogatories to “respond to the point raised by the protester

that the agency used ‘branches’ and ‘subsidiaries’ as if they were synonyms.” AR 256-28560

(Agency’s Answers to Interrogatories). The Air Force responded that “[it] reasonably used the

be considered “Danish firms and

not a subsidiary

of a foreign firm.” AR 20g-879 (emphasis

added).

The acquisition plan for the Thule Contract further shows that the Air Force was

concerned about ownership of the offerors. The Air Force initially identified only six potential

Danish or Greenlandic businesses.

See

AR 20zg-1507. It also characterized non-Danish or

Greenlandic firms as those entities with less than 49 percent Danish or Greenlandic ownership.

See

AR 20zg-1501, 1521. Notably, “a ‘subsidiary corporation’ is defined as ‘one in which

another corporation owns at least a majority of the shares and thus has control.’” Copenhagen

Arctic’s Mot. at 13 (quoting

Black’s Law Dictionary,

Fifth Edition, (1968)).

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term ‘subsidiary’ as a result of its international legal obligations” and stated that “[it]

did not

use the term ‘subsidiary’ by mistake.” Id.

(emphasis added). Second, irrespective of whether

Mr. [***] mistranslated “branch” for “subsidiary,”

see

AR 20f-873, the United States

Ambassador and the Danish Ministry of Finance negotiated the 2013 Diplomatic Note (written in

English) to expressly include the word “subsidiary,”

see

AR 20g-875. Absent from the

negotiated criteria in the 2013 Diplomatic Note were any references to a “branch.”

See

AR 20g-

874 to 875. Finally, the word “subsidiary” was also repeated several times by the contracting

officer during the RFP Q&A, as well as by Air Force personnel during the evaluation.

See

supra,

at 9, 16. Based on this evidence, the Solicitation prohibited foreign subsidiaries, not

foreign branches. Exelis Services’ argument is not persuasive.

Mindful of the bilateral agreements and understandings between the United States and

Danish government and in light of the foregoing, the only reasonable interpretation of the phrase,

“SHALL NOT BE REGISTERED AS A SUBSIDIARY OF [A] FOREIGN COMPANY,” is that

Danish subsidiaries of foreign entities did not qualify as eligible “Danish/Greenlandic

enterprises.”

See

AR 88-5252 to 5253, 5257 (emphasis in original). Company registration was

used mistakenly as a means to ensure genuine Danish or Greenlandic ownership and control.

Given that some recasting must be done to take account of this fault, the court’s reading accords

a reasonable meaning to all parts of Sections L-3 and L-6, except for the mistaken words

“registered as.”

See Banknote Corp. of Am.,

365 F.3d at 1353;

see also

Exelis Services’ Cross-Mot. at 40-49. Plaintiffs resist this contention by arguing that the mistake

concerning registration constituted a latent error that should be construed against the Air Force,

i.e.,

the drafter of the Solicitation.

See

Per Aarsleff’s Mot. at 18-23;

see also

Greenland

Contractors’ Mot. at 16-17; Copenhagen Arctic’s Mot. at 16-18. The court accordingly must

address whether the defect in the Solicitation was latent or patent.

See E.L. Hamm & Assocs.,

Inc. v. England,

379 F.3d 1334, 1342 (Fed. Cir. 2004) (“Just as a contractor may recover for a

latent ambiguity, a contractor may recover for a latent defect; just as a contractor may not

recover for a patent ambiguity, a contractor may not recover for a patent defect.”).

The doctrine of

contra proferentem

“puts the risk of ambiguity, lack of clarity, and

absence of proper warning on the drafting party which could have forestalled the controversy[,]

. . . and it saves contractors from hidden traps not of their own making.”

Metcalf Const. Co. v.

The language in the Solicitation was not ambiguous but rather was defective.

“Nevertheless, there are similarities in the law,”

E.L. Hamm & Assocs.,

379 F.3d at 1342, and the

court will treat the government and Exelis Services as arguing in favor of finding a patent defect

and plaintiffs as arguing for a latent defect.

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United States,

53 Fed. Cl. 617, 629 (2002) (alteration in original) (citing

Sturm v. United States,

190 Ct. Cl. 691, 697 (1970)). However, an exception to the rule of

contra proferentem

exists

when the defect in the solicitation is found to be patent, rather than latent.

See Blue & Gold

Fleet,

492 F.3d at 1313 (citing

E.L. Hamm & Assocs.,

379 F.3d at 1342). In

Blue & Gold Fleet,

the Federal Circuit held that a plaintiff that “has the opportunity to object to the terms of a

government solicitation containing a

patent error

and fails to do so prior to the close of the

bidding process waives its ability to raise the same objection subsequently in a bid protest action

in the Court of Federal Claims.” 492 F.3d at 1313 (emphasis added). The court explained,

We have applied the doctrine of patent ambiguity in cases where,

as here, a disappointed bidder challenges the terms of a solicitation

after the selection of another contractor.

See Stratos Mobile

Networks USA, LLC v. United States,

213 F.3d 1375, 1381 (Fed.

Cir. 2000);

Statistica, Inc. v. Christopher,

102 F.3d 1577, 1582

(Fed. Cir. 1996). Under the doctrine, where a government

solicitation contains a patent ambiguity, the government contractor

has ‘a duty to seek clarification from the government, and its

failure to do so precludes acceptance of its interpretation’ in a

subsequent action against the government.

Stratos,

213 F.3d at

1381 (quoting

Statistica,

102 F.3d at 1582).

Id.

A defect is patent “when the contract contains facially inconsistent provisions that would

place a reasonable contractor on notice and prompt the contractor to rectify the inconsistency by

inquiring of the appropriate parties.”

Stratos Mobile Networks,

213 F.3d at 1381. Conversely, a

defect is latent when it is hidden or concealed and not apparent on the face of the document.

See

J.C.N. Const., Inc. v. United States,

107 Fed. Cl. 503, 512 (2012) (distinguishing between “subtle

inconsistencies [that] do not put a reasonable contractor on notice” and “obvious, gross, [or]

glaring” inconsistencies that are patent) (alteration in original) (quoting

Grumman Data Sys.

Corp. v. Dalton,

88 F.3d 990, 997 (Fed. Cir. 1996) (in turn quoting

H & M Moving, Inc. v.

United States,

499 F.2d 660, 671 (Ct. Cl. 1974)));

see also

Exelis Services’

Cross-Mot. at 22 (acknowledging that “at the time of its registration, Exelis Services was a

subsidiary of [Vectrus] Systems, an American corporation”). On these facts, the Air Force

contravened federal procurement law when making an award based upon a proposal that failed to

satisfy the material source restriction that limited competition to Danish or Greenlandic entities

and not subsidiaries of foreign companies. Further, the government has neither “‘provided a

coherent and reasonable explanation of its exercise of discretion’” in making the award to a

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Danish subsidiary of a non-Danish company,

Impresa Construzioni,

238 F.3d at 1333 (quoting

Latecoere Int’l, Inc. v. United States Dep’t of Navy,

19 F.3d 1342, 1356 (11th Cir. 1994)), nor

has it articulated a “‘rational connection between the facts found and the choice made,’”

Motor

Vehicle Mfrs.,

463 U.S. at 43 (quoting

Burlington Truck Lines v. United States,

371 U.S. 156,

168 (1962)).

In short, the agency’s decision to award Exelis Services the Thule Contract was arbitrary

and capricious and not in accord with federal procurement law.

See

5 U.S.C. § 706(2)(A).

Performance Standard for Subcontracting

Greenland Contractors and Copenhagen Arctic further aver that the Air Force failed to

evaluate the proposals in accord with Section H-6 and PWS 3.1.16 of the Solicitation, which

required offerors to “[m]aximize . . . contract-related purchases and subcontracts from Danish

and Greenlandic sources” and to “[d]ocument and justify any exceptions.” AR 88-5227, 5279;

see also

Greenland Contractors’ Mot. at 18-22; Copenhagen Arctic’s Mot. at 20-27.

Both of

these plaintiffs contend that if Per Aarsleff should be awarded the contract, work would be

performed by the United States-based subcontractor, [***],

see supra,

at 18 n.23. Greenland

Contractors and Copenhagen Arctic argue that the Air Force unreasonably failed to evaluate Per

Aarsleff’s justification for relying on the United States teaming partner.

See

Greenland

Contractors’ Mot. at 20;

see also

Copenhagen Arctic’s Mot. at 21-22.

Per Aarsleff does not

deny that it intends to rely on [***] if awarded the Thule Contract. Rather, it aligns itself with

Copenhagen Arctic argues that these passages permitted a contractor to subcontract

with a foreign entity only when it was “not feasible” to use Danish or Greenlandic sources.

See

Copenhagen Arctic’s Mot. at 21. The “feasible” language cited by Copenhagen Arctic can be

found in the 2009 Diplomatic Note that amended Article IV of the 1991 MOU.

See

AR 20z-

1443. The 2009 Diplomatic Note stated that the two governments “shall procure directly from

Danish/Greenlandic sources,” but “[w]hen procurement from such sources is not feasible, U.S.

requirements may be satisfied by procurement from U.S. or other sources.”

Id.

Also pertinent is

the 1962 Aide Memoire discussed

supra,

at 5.

In like vein, Greenland Contractors urges that Copenhagen Arctic was also required to

justify use of its United States partner, DynCorp International, because that entity would be

responsible for performing a significant portion of the work if Copenhagen Arctic had won the

award.

See

Greenland Contractors’ Mot. at 20. Copenhagen Arctic disagrees and avers that

“[a]ll of the subcontractors to be used . . . are ultimately owned by Danish companies,”

Copenhagen Arctic’s Mot. at 22. Copenhagen Arctic does, however, admit that one Danish

subcontractor, Burmeister & Wain Scandinavian Contractors (“BWSC”), is ultimately owned by

a non-Danish company,

see

Copenhagen Arctic’s Reply at 19 n.4 (“In 1990 BWSC’s Danish

parent company was acquired by a Japanese company.”). It also notes that if awarded the

contract, it plans to rely on a Swedish company, Volvo Construction Equipment, but only as a

“supplier,” not as a subcontractor.

See id.

In response, Exelis Services notes that “under the

Federal Acquisition Regulation, a ‘subcontactor’ is defined as ‘any

supplier,

distributor, vendor,

or firm that

furnishes supplies

or services to or for a prime contractor or another subcontractor.’”

Exelis Services’ Reply at 24 n.29 (emphasis in original) (quoting FAR § 44.101).

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the government and Exelis Services on this protest ground, arguing that “[S]ection H-6 and PWS

3.1.16 apply only to post-award subcontract arrangements and merely reflect a subjective

‘performance standard’ to maximize purchases from Danish and Greenlandic sources, not a strict

and measurable offeror eligibility requirement or minimum proposal qualification.” Per

Aarsleff’s Mot. at 28-29;

see also

Def.’s Cross-Mot. at 41 (“Copenhagen Arctic and Greenland

Contractors’ arguments are meritless because offerors were not required to justify their use of

United States subcontractors in their proposals.”); Exelis Services’ Cross-Mot. at 54 (“[T]hese

RFP provisions establish performance standards to be used in the administration of the contract,

but do not—as Greenland Contractors asserts—establish eligibility or evaluation criteria.”).

The court agrees that the RFP provisions cited by Greenland Contractors and

Copenhagen Arctic establish post-award performance standards that pertain to administration of

the contract and do not create a supplementary evaluation criterion.

See, e.g.,

AR 88-5227.

(Section H is titled “Special

Contract

Requirements”) (emphasis added).

Indeed, there were no

instructions in Section L (“Instructions, Conditions, and Notices to Offerors”) to include

documentation regarding use of foreign subcontractors, and Section M (“Evaluation Factors for

Award”) did not require the Air Force to evaluate offerors in accord with PWS 3.1.16.

Cf. Bae

Sys. Tech. Solutions & Servs., Inc.,

B-409914, 2014 WL 5804275, at *7 n.5 (Comp. Gen. Sept.

16, 2014) (holding that certain criteria were “not part of the key personnel evaluation under

section M of the [task order request], but rather, a performance requirement listed in section H.10

of the [task order request] under personnel training and certification requirement.”). And further,

the plain text of the Solicitation makes evident that the focus of Section H-6 and PWS 3.1.16 is

on “purchases and subcontracts” relating to

products,

not services.

See

AR 88-5277.

Section

H notes that “[p]roducts not acquired by Danish and/or Greenlandic sources must be procured

[in accord with certain identified FAR provisions],” AR 88-5227 (emphasis added), and PWS

3.1.16 requires compliance with FAR § 52.223-2, which governs “Affirmative Procurement of

Biobased

Products

Under Service and Construction Contracts,” AR 88-5279 (emphasis added).

Because Section H-6 and PWS 3.1.16 establish performance standards rather than

eligibility criteria, Copenhagen Arctic’s reliance on

Technology Servs. Int’l, Inc.,

B-276506,

1997 WL 658746 (Comp. Gen. May 21, 1997), is misplaced. In

Technology Services,

GAO

recommended that the Air Force reevaluate proposals because the awardee had not provided a

requisite work scheduling system in its proposal. 1997 WL 658746, at *4. There, the work

scheduling system was a requirement of the RFP, which stated that an “offeror will be evaluated

to assess whether its quality control plan included, among other things, ‘a work scheduling

system which shows by area the day and time when all requirements covered in the PWS will be

accomplished.’”

Id.,

at *2. Contrary to the subcontracting requirement in this Solicitation, the

work scheduling system in

Technology Services

was required to be included in the proposal

itself; it was not simply a performance requirement as here.

See id.,

at *2, *4.

The Aide Memoire, invoked under Section H-6, reinforces this interpretation. It

addressed “[p]articipation of Danish suppliers in the areas of

local purchase items and

perishable subsistence”

and provided that “total volume of such

purchases

. . . would be solicited

each fiscal year from Danish sources by a purchasing activity located in Copenhagen.” AR 20zf-

1467 to 1468 (emphasis added).

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Read together, these clauses cannot be interpreted to apply to an offeror’s proposed teaming

arrangement.

Nonetheless, teaming arrangements were important insofar as employment opportunities

for Danish and Greenlandic citizens were concerned. Copenhagen Arctic emphasizes that

Section M of the Solicitation required compliance with “all stated terms, conditions,

representations, certifications, and all other information required by Section L of this

[S]olicitation,” and “[n]on-compliance with the RFP may be ground to eliminate the proposal

from consideration for contract award.” Copenhagen Arctic’s Mot. at 23 (quoting AR 88-5261,

5254). All four offerors submitted proposals agreeing to comply with paragraph 3.1.16 of the

PWS during performance of the contract,

see

AR 173-15049 (Copenhagen Arctic’s Proposal

Revisions (July 23, 2014)) (“We have no exceptions to the solicitation terms and conditions.”);

AR 111-7908 (Per Aarsleff’s Proposal Revisions (July 3, 2014)) (“We take no exceptions to the

terms and conditions included in the solicitation.”); AR 153-12281 (Greenland Contractors’

Initial Proposal (May 9, 2014)) (“Greenland Contractors I/S has no exceptions to any of the

solicitation requirements.”); AR 97-6314 (Exelis Services’ Initial Proposal (May 9, 2014))

(“Exelis [Services] will comply with all of the Performance Work Statement (PWS) require-

ments and takes no exception to any of the terms, conditions, representations, certifications or

provisions in this [S]olicitation.”). A contracting officer is ordinarily entitled to rely upon such

certifications when determining whether to accept a proposal.

See Allied Tech. Grp., Inc. v.

United States,

649 F.3d 1320, 1330 (Fed. Cir. 2011). Even so, the court may inquire whether

there was a basis on the face of the offers for the Air Force to conclude that the offerors could

not (or would not) comply with Section H or PWS 3.1.16 during contract performance.

See

Hyperion,

115 Fed. Cl. at 553 (finding that the agency should have found proposals to be

technically unacceptable where it was readily apparent that the offerors “would not and could not

comply with the limitations on subcontracting incorporated into the solicitation”) (citing

Centech

Grp.,

554 F.3d at 1038).

Greenland Contractors argues that the court’s decision in

Hyperion

“is on all fours with

this case . . . [b]ecause it was clear from the face of their proposals that Exelis [Services], Per

Aarsleff, and Copenhagen Arctic . . . inten[ded] to [***].” Greenland Contractors’ Mot. at 19,

21. In

Hyperion,

a limitation-on-subcontracting clause, set forth in FAR § 52.219-14, was

applicable and required that “[a]t least 50% of the cost of the contract performance incurred for

personnel shall be expended for employees of the [small business].”

Id.

at 551 (alteration in the

original) (citing FAR § 52.219-14(c)(1)).

In response, the government avers that

Hyperion

“is

easily distinguishable” because PWS 3.1.16 “contains no firm limitation on subcontracting to

United States concerns.” Def.’s Reply at 12. Additionally, the government contends that there

was nothing on the face of the proposals to indicate that the offerors did not intend to comply

with the PWS or Section H.

Id.

at 12-13.

“In

Centech,

a contract awardee lost the award upon protest by another offeror because

the awardee’s proposal stated that it would incur only 43.2% of the contract’s labor costs . . . .

The court noted that the pertinent question was not whether the awardee

could

comply with the

limitation-on-subcontracting clause, but rather whether it

would

comply with the limitation.”

Hyperion,

115 Fed. Cl. at 551 (alteration in original) (citing

Centech Grp.,

554 F.3d at 1033,

1040).

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The court agrees with the government that this case is factually distinguishable from

Centech

and

Hyperion.

The proposals submitted by the offerors for this Solicitation lacked

facial indications that the offerors could not or would not maximize the use of Danish or

Greenlandic employees during contract performance. Besides submitting proposals agreeing to

comply with the terms of the Solicitation during performance of the contract, the proposals

submitted by Per Aarsleff, Exelis Services, and Copenhagen Arctic were ostensibly compliant

with Section H and PWS 3.1.16. Additionally, the Air Force did make some inquiries into

whether teaming arrangements between Danish offerors and American subcontractors provided

appropriate opportunities for Danish and Greenlandic employees. The ENs were answered, in at

least one instance by a change providing that the Danish contractor and not the American

subcontractor would be the employer. Hr’g Tr. 64:11 to 65:8 (May 22, 2015) (describing the EN

made to, and the revised proposal submitted by, Copenhagen Arctic).

Greenland Contractors

contends that the Air Force did not effectively query the other offerors even though it “had . . . in

front of it, based on the proposals, . . . strong indications that the[] offerors were not planning to

maximize their use of subcontractors from Denmark or Greenland, and, in fact, were going to use

their U.S. partners.” Hr’g Tr. 46:11-16. There is some validity to the point made by Greenland

Contractors about teaming, both respecting Exelis Services and Per Aarsleff,

see

Hr’g Tr. 62:10-

25, but those offerors appear to have been planning to [***]. Hr’g Tr. 100:14 to 101:3.

The Air Force specifically acknowledged that Danish and Greenlandic offerors could use

United States-based subcontractors to compete for the contract. In response to a question asking

whether or not “subcontractors [can] come from . . . the US,” the Air Force stated that the “only

requirements that the [g]overnment know[s] of until the [Danish Ministry of Foreign Affairs]

criteria give more guidance” were that the prime contractor had be a “Danish company” and

employees had to be “US or Danish citizens.” AR 62-3509 (Industry Day Question Answer

Matrix). Absent from this answer was any requirement that subcontractors had to be Danish or

Greenlandic.

See id.

Per Aarsleff correctly notes that “these statements from [the Air Force]

reinforce the interpretation that the RFP did not prohibit U.S. teaming partners, and that the

preference for Danish or Greenlandic subcontractors pertained to acquisition of supplies during

performance.” Per Aarsleff’s Mot. at 32. The government also argues that “[e]xcluding offerors

for not justifying their use of United States companies as teaming partners or subcontractors

would have introduced unstated evaluation criteria in violation of [FAR] § 15.305(a).” Def.’s

Cross-Mot. at 46 (citing

Coburn Contractors, LLC,

B-408279.2, 2013 WL 5718848 (Comp.

Gen. Sept. 30, 2013));

see also

FAR § 15.305(a) (“An agency shall evaluate competitive

proposals and then assess their relative qualities solely on the factors and subfactors specified in

the solicitation.”).

In short, Copenhagen Arctic and Greenland Contractors have not shown that the Air

Force misapplied Section H-6 and PWS 3.1.16. The Air Force did not err by failing to disqualify

proposals by offerors during the procurement on that ground.

Further citations to the transcript of the hearing on the merits will omit the date.

As noted earlier, Greenland Contractors raises two additional claims,

viz.,

that (1) the

Air Force engaged in misleading discussions related to Greenland Contractors’ proposed pricing,

and (2) that the Air Force was obliged to evaluate whether the other offerors had justified their

lower pricing.

See

Greenland Contractors’ Mot. 28-37. In light of the court’s rulings on other

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Prejudice

Relief in a bid protest may be available to a protestor that demonstrates not only that

there was a significant error in the procurement process but also that it was prejudiced by the

error.

See PGBA, LLC v. United States,

60 Fed. Cl. 196, 203 (2004),

aff’d,

389 F.3d 1219 (“To

prevail in a bid protest, a disappointed offeror must show both significant error in the

procurement process and prejudice to its posture in the process.”) (citing

Advanced Data

Concepts,

216 F.3d at 1057). In this respect, a protestor must show that there was a “substantial

chance it would have received the . . . contract award, but for the alleged error in the

procurement process.”

McAfee, Inc. v. United States,

111 Fed. Cl. 696, 712 (2013) (quoting

Gentex Corp. v. United States,

58 Fed. Cl. 634, 653 (2003)) (citing cases). This inquiry into

“prejudice” is separate from the inquiry into standing,

see supra,

at 25. “While both use the

‘substantial chance’ doctrine, prejudice at the jurisdictional threshold can be satisfied on the

basis of the plaintiff’s allegations, whereas prejudice on the merits can only be satisfied by the

effect of an agency decision adjudged to be unlawful.”

Hyperion,

115 Fed. Cl. at 556 (citing

Linc Gov’t Servs., LLC v. United States,

96 Fed. Cl. 672, 696 (2010)).

Here, the Air Force knowingly awarded the Thule Contract to a wholly-owned shell

company created by a non-Danish, non-Greenlandic parent company in contravention of a

material term in the Solicitation that prohibited subsidiaries of such entities from competing in

the procurement. The Air Force has indicated that it will conduct a new acquisition at some

future date based on new eligibility criteria. Plaintiffs were prejudiced by the Air Force’s error

respecting eligibility. Each of them was a Danish company or a Danish partnership, and each

was principally owned by Danish or Greenlandic sources. Had the Air Force properly applied

the eligibility criteria during the procurement, it would have found Exelis Services’ proposal to

be unacceptable, the plaintiffs would have had a substantial chance of receiving the award, and

one of the plaintiffs would have won the competition with a lowest-priced, technically acceptable

and eligible proposal. This second inquiry into prejudice has been satisfied.

See Hyperion,

115

Fed. Cl. at 556;

see also

28 U.S.C. § 1491(b)(2)

(“[M]onetary relief [in a bid protest] shall be limited to bid preparation and proposal costs.”).

The competitive detriment to plaintiffs, stemming from the denial of a fair opportunity to

participate in a lawful procurement process, also engenders irreparable harm.

See Hyperion,

115

Fed. Cl. at 557;

see also Hospital Klean of Tex., Inc. v. United States,

65 Fed. Cl. 618, 624

(2005) (“[L]oss of profit, stemming from a lost opportunity to compete for a contract on a level

playing field has been found sufficient to constitute irreparable harm.”) (citing cases).

The court must balance the potential harm to plaintiffs in not granting an injunction

against the potential harm to the government should an injunction be granted.

See PGBA,

389

F.3d at 1231-32;

see also

Def.’s Reply at 22 n.16 (“[E]ven a two or three month delay

and award to [a contractor] would likely cost the Air Force [***].”).

Although “[e]conomic harm to the [g]overnment is . . . a relevant factor,” Def.’s Reply at

22 (citing cases), the “burden of re[-]procurement costs” occurs whenever an improper award of

a contract is set-aside.

See Huntsville Times Co. v. United States,

98 Fed. Cl. 100, 122 (2011)

(“[T]he government would, of course, bear . . . the burden of re[-]procurement costs.”). Further,

even if the Air Force is harmed in the ways the government asserts, such harm is attributable to

“delays of [the Air Force’s] own creation.”

Sheridan Corp. v. United States,

95 Fed. Cl. 141,

155 (2010);

see also Parcel 49C Ltd. P’ship v. United States,

31 F.3d 1147, 1153 (Fed. Cir.

1994) (rejecting the government’s attempt “to preserve its ill-gotten gain” and affirming a trial

court’s injunction that “returned the contract award process to the status quo ante any illegality”).

The Air Force “could have forestalled this controversy simply by excluding Exelis Services from

the competition when it explicitly informed the agency that it was a wholly-owned subsidiary [of

The assertion that a re-procurement may be more expensive because the award may go

to a “higher-priced offeror,” Def.’s Cross-Mot. at 63, in effect is predicated on using the

improper contractual award as a baseline for measuring financial harm.

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a U.S. company] (June 2014), or when the [Danish Business Authority] informed AFSPC that it

was not possible to register as a foreign subsidiary in the CVR (August 2014).” Per Aarsleff’s

Mot. at 37. In short, the government has awarded the contract to an ineligible offeror, and it has

not demonstrated that the additional financial costs to the Air Force associated with granting

injunctive relief outweigh the harm to plaintiffs denied an opportunity to compete based upon

properly applied eligibility criteria.

Cf. ARKRAY USA, Inc. v. United States,

118 Fed. Cl. 129,

138 (2014) (finding that the balance of hardships weighed in bid-protestor’s favor, even though

the government represented “that it will save as much as $64.8 million per year” if it were

allowed to proceed with an award issued in error).

Finally, the public interest in maintaining the integrity of the procurement process weighs

heavily in favor of granting a permanent injunction.

See Hyperion,

115 Fed. Cl. at 557;

see also

PGBA,

60 Fed. Cl. at 221. The public interest is best served by abiding by the required

eligibility criteria and evaluative steps in a procurement.

BCPeabody Constr. Servs., Inc. v.

United States,

112 Fed. Cl. 502, 514 (2013). Moreover, the Danish and United States

governments are currently collaborating to correct the mistake regarding the eligibility criteria.

Permitting Exelis Services to continue as the contractor for Thule Air Base and receive the

benefits of the Thule Contract not only is inconsistent with these diplomatic discussions, but it

“betray[s] the spirit of the [bilateral] agreements and intent of the original eligibility criteria.”

Per Aarsleff’s Mot. at 38.

There is also no reason to believe that an injunction will cause any interruption of vital

services to Thule Air Base or affect the critical missions of the base.

See

Greenland Contractors’

Reply at 28-29;

see also

Def.’s Cross-Mot. at 60-63 (discussing costs associated with an

injunction, but omitting any argument that an injunction would prevent the Air Force from

ensuring continuity of service at Thule Air Base); Def’s Reply at 21-23 (same).

The requirements for issuance of equitable relief have been satisfied, and the Air Force’s

contractual award to Exelis Services should be set aside. Despite plaintiffs’ urgings, the court

declines to provide any more specific instruction to the Air Force regarding its further actions in

this procurement.

CONCLUSION

For the reasons stated, plaintiffs’ motions for judgment on the administrative record are

GRANTED, and the government’s and Exelis Services’ cross-motions for judgment on the

administrative record are DENIED. The award by the Air Force of the Thule Contract to Exelis

Services is set aside, and the Air Force is enjoined from proceeding with that contract. The clerk

is directed to issue final judgment in accord with this disposition.

Plaintiffs are awarded their costs of suit.

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It is so

ORDERED.

s/ Charles F. Lettow

Charles F. Lettow

Judge