In a rare move, the U.S. Court of Federal Claims (COFC) imposed sanctions on the United States Environmental Protection Agency (EPA) for its conduct during the bid protest of Coastal Environmental Group, Inc. v. United States. While the EPA ultimately prevailed on the merits of the protest, the EPA’s conduct was so egregious that COFC took the rare step of publicly chastising the agency for “bad faith” conduct during the protest, and required the EPA to pay a portion of the attorney’s fees incurred by the protestor, plus a $1,000 fine directly to the court.
The protest concerned the EPA’s decision to cancel a procurement for soil remediation services. During the course of the protest, the EPA prepared a “Determinations and Findings” document explaining the EPA’s reasons for terminating the initial contract awarded to another firm and to use existing contracting vehicles to satisfy its soil remediation needs, and then backdated that document by ten months to make it appear as if it had been prepared at the time the contract was terminated, rather during the course of litigation. To make matters worse, the document inaccurately reflected that the primary reason for the termination was the EPA’s ability to satisfy its soil remediation needs through existing contracts.
COFC sanctioned the EPA for preparing an inaccurate backdated document, and including that document in the supplemental administrative record, and falsely certifying that the supplemental administrative record was an accurate representation of the EPA’s actions relevant to the protest – classifying the acts as the “submission of falsified evidence.”
The court has concluded that Ms. Nero and Ms. Thomas acted in bad faith when they prepared a Determination and Findings document, and subsequently included that document in the supplemental administrative record, with the knowledge that the document was backdated and contained inaccurate information, and with the further knowledge that the supplemental administrative record would be used in proceedings in the Court of Federal Claims. The court has also concluded that Ms. Thomas acted in bad faith by representing in her certification of the supplemental administrative record that she carefully reviewed the record and that the record constituted the record of the actions taken by the EPA that were relevant to plaintiff’s protest, because she acknowledged that she did not review the record and because the record contained an inaccurate, backdated document.
COFC further explained that sanctions were necessary in this case to deter future conduct that would call into question the “integrity of the administrative record” and because the officials who had carried out the bad faith acts had done so in face of the presumption that federal government contracting officials perform their duties in good faith:
The bad faith conduct of Ms. Nero and Ms. Thomas caused plaintiff’s counsel, defense counsel, and the court to question the integrity of the administrative record compiled by the EPA. Given that one document was created ten months after the fact for the purposes of litigation, could it be that other documents were similarly created for the purposes of litigation? Does the false certification of one part of the administrative record call into question the authenticity of the certification of the rest of the administrative record? The resulting investigation into these questions, and the subsequent efforts to address and resolve the issues raised by that investigation, required the expenditure of significant resources—both time and money—by counsel and the court. These were resources that could have been devoted to addressing the merits of the protest or devoted to work on matters unrelated to this protest. In sum, there is no question that the actions of Ms. Nero and Ms. Thomas had significant adverse consequences in this protest.
As previously stated, RCFC 11(c)(4) provides that sanctions are meant to deter future misconduct. Deterrence is particularly important in this case due to the presumption that federal government contracting officials perform their duties in good faith. …. That presumption is overcome when contracting officials take actions similar to those taken by Ms. Nero and Ms. Thomas in this case, i.e., preparing a backdated, inaccurate document; including that document in the supplemental administrative record; and then certifying the integrity of the record. One of the court’s goals in sanctioning the bad faith conduct of the contracting officer and her supervisor in this case is to deter further similar misconduct by contracting officials.