march 2, 2006 presented by: richard l. hanson mark g. jackson establishing abuse of discretion
TRANSCRIPT
March 2, 2006
Presented by:Richard L. HansonMark G. Jackson
Establishing Abuse of Discretion
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Introduction
Claim frequently made, infrequently won
Frequency of claim likely to increase
Court, board decisions are inconsistent and misleading
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Why so little success?
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Keco Industries, Inc. v. United States,
203 Ct. Cl. 566 (1974)
Why so little success?
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Keco Industries—Background
Post-award bid protest alleging arbitrary and capricious decision
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Post-award bid protest alleging arbitrary and capricious decision
The “Keco factors” Subjective bad faith depriving bidders of fair
consideration No reasonable basis for the decision Degree of proof necessary is related to the amount of
discretion available on the issue Violation of statute or regulation may provide a basis
for recovery
Keco Industries—Background
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Keco Industries—The Problems
Injects “bad faith” into the discussion
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Injects “bad faith” into the discussion
“The burden of proving bad faith by the Government is a very onerous one and for an action or an inaction of the Government to constitute bad faith or abuse of discretion, some specific intent to injure the other party or actions motivated by malice alone must be proven to overcome the presumption that public officials act in good faith in the discharge of their duties.”
Coates Indus. Piping, Inc., VABCA No. 5412, 99-2 B.C.A. ¶ 30, 479
“Not far removed from the bad faith test is the second factor, proof that there was "no reasonable basis" for the administrative decision. Action by the Government which has no reasonable basis, the court noted, is often equated with conduct motivated by subjective bad faith.”
Burroughs Corp. v. US, 617 F.2d 590 (Ct. Cl. 1980)
Keco Industries—The Problems
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Injects “bad faith” into the discussion
Not a helpful analytical tool
Keco Industries—The Problems
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Injects “bad faith” into the discussion
Not a helpful analytical tool
“Under [the implied contract] theory, the standard of review was far narrower than district court review under the APA….”
Impressa Construzioni Geom. Domenico Garufi v. US, 238 F.3d 1324 (Fed. Cir. 2001)
Keco Industries—The Problems
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Injects “bad faith” into the discussion
Not a helpful analytical tool
Doesn’t apply
Keco Industries—The Problems
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Injects “bad faith” into the discussion
Not a helpful analytical tool
Doesn’t apply
“In any event, cases such as Keco and Trilon are based on the implied contract theory of recovery and do not govern APA review of contracting officer decisions.”
Impresa Construzioni, 238 F.3d 1324 (Fed. Cir. 2001)
Keco Industries—The Problems
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No Longer Applicable Even for CoFC Bid Protests
ADRA Change to More Liberal APA Standards
Arbitrary, Capricious, Abuse of Discretion
5 U.S.C. § 706
Information Technology v. U.S., 316 F.3d 1312
AFGE v. U.S., 258 F.3d 1294
Keco Industries—The Problems
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Injects “bad faith” into the discussion
Not a helpful analytical tool
Doesn’t apply—but see“In deciding the abuse of discretion issue, the Board properly considered (1) evidence of whether the government official acted with subjective bad faith; (2) whether the official had a reasonable, contract-related basis for his decision; (3) the amount of discretion given to the official; and (4) whether the official violated a statute or regulation.”
Campbell Plastics Eng’g & Mfg., Inc. v. US, 389 F.3d 1243 (Fed. Cir. 2004)
Keco Industries—The Problems
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Discretionary Decision Analysis
Did the CO have authority to exercise discretion?
Did the CO make a decision?
Did the CO consider the relevant factors?
Is the decision irrational or does it involve the violation of a statute or regulation?
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Discretionary Decision Analysis—Authority
Authority to decide ≠ authority to exercise discretion
Mandatory vs. precatory vs. permissive
Cole’s Constr., Inc., ENG BCA No. 6074, 94-3 B.C.A. ¶ 26,995
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Discretionary Decision Analysis—Decision by CO
“Government” vs. “Contracting Officer”
Abdication theory
Recently revisited by COFC
Impresa Construzioni, 52 Fed. Cl. 421 (2002)
CEMS, Inc. v. US, 65 Fed. Cl. 473 (2005)
OTI America, Inc. v. US, 68 Fed. Cl. 646 (2005)
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Discretionary Decision Analysis—Relevant Factors
Depends on subject matter
Required by regulation, e.g. FAR 49.402-3
Provided by decision, e.g. Balboa Ins. Co. v. US, 775 F.2d 1158 (Fed. Cir. 1985)
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Discretionary Decision Analysis— Reasonableness
Not a “difference of opinion”
Objective analysis
The more discretion afforded, the greater the range of “reasonable” outcomes
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Conclusion
Don’t assume discretion exists
Ensure decision is made
Be creative in the search for and identification of relevant factors
Identify limitations on range of discretion
Questions?
Next Webcast Presentation:Beyond Mediation and Arbitration: How to Effectively Use ADR in Government Contracts DisputesConducting ADR with the federal government presents its own unique challenges and opportunities, including the opportunity to use the full range of ADR techniques. This webcast will cover the wide variety of ADR tools available and help you select and apply the right one to resolve contract disputes with the federal government.
April 5, 200612:00 p.m. - 1:30 p.m. Eastern9:00 a.m. - 10:30 a.m. Pacific
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Thank you! Please contact us anytime with additional questions.
Richard [email protected]
Mark [email protected]