      In the United States Court of Federal Claims
                                  No. 17-1407C
                       (Filed under seal February 8, 2018)
                          (Reissued February 16, 2018)†

* * * * * * * * * * * * * * * * * *
                                  *
                                  *
ARXIUM, INC.,                     *         Post-award bid protest; Air Force
                                  *         pharmacies; Federal Supply
                 Plaintiff,       *         Schedule; GAO protest; arbitrary
                                  *         corrective action; failure to consider
      v.                          *         important aspects; latent ambiguity;
                                  *         retroactive interpretation; unfair
THE UNITED STATES,                *         discussions; arbitrary interpretation;
                                  *         failure to allow revised proposals;
                 Defendant,       *         injunctive relief.
                                  *
           and                    *
                                  *
INNOVATION                        *
ASSOCIATES, INC.,                 *
                                  *
           Defendant-Intervenor.  *
                                  *
* * * * * * * * * * * * * * * * * *

      Fernand A. Lavallee, Jones Day, with whom were J. Andrew Jackson, Cherie
J. Owen, Alexander M. Yabroff, Ryan P. McGovern, and Robin Overby, all of
Washington, D.C., for plaintiff.

       Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil
Division, Department of Justice, with whom were Chad A. Readler, Acting
Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Reginald T.
Blades, Jr., Assistant Director, all of Washington, D.C., for defendant. Jared P.
Weissberger, Senior Counsel, Medical, DLA Counsel-Troop Support, with whom was
Gail Furman, both of Washington, D.C., of counsel.



† The parties were given the opportunity to request redactions, and plaintiff and
defendant did so. The Court found the requests to be overbroad, and accepted some
of them, with redacted language replaced as follows: “[XXXX].” The opinion is
reissued for publication with a few minor, non-substantive corrections.
      Stuart B. Nibley, K&L Gates, LLP, with whom were Amy M. Conant and
Erica L. Bakies, all of Washington, D.C., for defendant-intervenor Innovation
Associates, Inc.

                             OPINION AND ORDER

WOLSKI, Judge.

        This post-award bid protest has been brought by plaintiff ARxIUM, Inc., the
initial awardee under a Federal Supply Schedule (FSS) procurement. Following a
successful Government Accountability Office (GAO) protest brought by intervenor
Innovation Associates, Inc. (Innovation), the government changed its interpretation
of two solicitation requirements, and as a consequence determined that ARxIUM’s
quotation was technically unacceptable. Plaintiff challenges this corrective action,
and the resulting award to Innovation, as arbitrary and irrational.

       Before the Court are the parties’ motions for judgment on the administrative
record pursuant to Rule 52.1(c) of the Rules of the United States Court of Federal
Claims (RCFC). As explained more fully below, the Court finds that it was
arbitrary for the government not to amend the solicitation and accept revised
quotations after its interpretation of the two requirements in question had changed.
Accordingly, ARxIUM’s motion for judgment on the administrative record and
request for permanent injunctive relief are GRANTED, and the government’s and
Innovation’s motions for judgment on the administrative record are DENIED.


                                I. BACKGROUND

A. Solicitation

        On August 11, 2015, the Defense Logistics Agency (DLA) issued Request for
Quotations No. 1019219 (RFQ or solicitation) under the FSS on behalf of the United
States Air Force for certain pharmacy automation equipment to be installed at four
refill center sites: Lackland Air Force Base (AFB) in Texas, Luke AFB in Arizona,
Nellis AFB in Nevada, and Patrick AFB in Florida. Admin. R. (AR) at 192, 196.
The RFQ explained that, in response to a presidential mandate to reduce system
error, the Air Force purchased “an Enterprise-wide Pharmacy Automation solution
in 2002.” Id. at 196. The Air Force intended to purchase new equipment to replace
that aging infrastructure. Id. The final page of the RFQ was a “Caution Notice,”
advising potential awardees that their proposals must conform to the minimum
requirements which followed. Id. at 199. The award was to be made to the lowest-
price technically acceptable offer, and would result in four firm-fixed price delivery



                                         -2-
orders under the FSS provisions of the Federal Acquisition Regulation (FAR). Id. at
197 (citing 48 C.F.R. § 8.405).

       Two requirements in particular are relevant to this proceeding. The first is
Minimum Requirement #23, which stated that “[w]hen verifying prescriptions, the
solution shall allow the pharmacist to view the first fill image of the original written
prescription and display electronic prescription data to assist in rapid verification.”
AR at 201, 329. The second requirement is for 36 “nesting stations” that were
identified in a table describing the hardware to be installed at the four facilities. Id.
at 204, 332. In the caution notice, a “nesting station” is defined as “an area on the
conveyor system that has a nesting reader attached to it.” Id. at 199. If a container
for prescriptions known as a “tote” or “puck” was proposed by an offeror, these
readers were to obtain information from the tote or puck concerning the
prescriptions. See AR at 325. As we will see, Innovation, which had supplied the
systems currently in use at the four refill centers, proposed using totes in which this
information was contained in Radio-Frequency Identification (RFID) tags, see AR at
1434, 1444–45, while plaintiff proposed totes upon which this information was to be
found on [XXXX] license plates, id. at 705.5.

B. Evaluation of Quotations and Award of Contract

      The two offerors, ARxIUM and Innovation, submitted responses by the initial
August 28, 2015 deadline. Three rounds of formal discussion letters, as well as
several emails, were sent by DLA to the offerors. Id. at 410, 483.1 The first letters
were sent on December 1, 2015. The letter to ARxIUM dealt with a number of the
minimum requirements---including a question, of relevance here, regarding
requirement #23. The discussion question and ARxIUM’s response are as follows:

      Clarification Letter #1 dated December 1, 2015: Please clarify if
      your proposed solution displays Original First Fill image of Rx and
      Electronic Rx info as required.

      Arxium’s Response to Clarification Letter #1 dated December
      15, 2015: “The proposed solution displays Original First Fill image of
      Rx and Electronic Rx info as required. This data is transmitted to our
      system via the [Air Force’s Composite Healthcare System (CHCS)]
      interface.”

AR at 433; see also AR at 703.7.

1 The agency interchangeably referred to these as discussions, clarifications, and
negotiations, and explained that their purpose was “to ensure that [offeror
responses] were technically acceptable.” AR at 410, 483.

                                          -3-
      A second letter, also dealing with a number of different topics, was sent to
ARxIUM on February 17, 2016. The relevant portion, along with ARxIUM’s
response, is reproduced below:

      For the nesting stations, the government is unclear of how the [XXXX]
      scanner meets the nesting station requirement. Is it handheld or
      attached directly to the conveyor? On the drawings, where is it
      installed? Please indicate. Please provide a drawing or specification
      sheet of the nesting station?

      ARxIUM RESPONSE: ARxIUM utilizes a functional equivalent to a
      nesting station that differs only in the scan method of identify[ing] a
      tote.

      A nesting station is a system fixture utilized to identify processing
      totes at a workstation via an RFID reader that scans an RFID chip
      attached to the tote. In this process, the technician removes the tote
      from the conveyor, places it in the nesting station and the RFID reader
      scans the chip and populates the workstation screen User Interface
      with the tote order data.

      ARxIUM accomplishes this identification process by utilizing the
      workstation’s desktop [XXXX] scanner to read a [XXXX] tote “license
      plate” that is affixed to every tote. To conduct the identification
      process, the technician simply places the end of the tote in front of the
      desktop [XXXX] scanner and the scanner reads the [XXXX] and
      populates the workstation screen User Interface with
      the tote order data. Every ARxIUM workstation is equipped to read
      totes in this fashion.

AR at 705.5; see also AR at 480–81.

      A final discussion letter was sent to ARxIUM on November 18, 2016. AR at
924.1. In this letter, DLA requested a number of screenshots of ARxIUM’s proposed
system, demonstrating how the system would meet various requirements, including
requirement #23. AR at 924.2. On November 29, 2016, ARxIUM sent in a reply,
including a screen shot of its system displaying first fill image data. AR at 924.7.

      Two months later, on January 26, 2017, DLA sent ARxIUM an email
requesting additional information concerning plaintiff ’s nesting station proposal,
which ARxIUM answered that same day. In relevant part, DLA asked: “It appears
that Arxium didn’t mention[ ] if this was a fixed, or hand held [XXXX] reader—as

                                         -4-
requested in the question. Arxium didn’t indicate (on a drawing) exactly where the
[XXXX] Scanner was located—as requested in the question.” AR at 481. Plaintiff
responded:

      The proposed solution utilizes a tabletop [XXXX] reader assembly that
      consists of a mounting base that holds a removable reader unit that is
      connected to the workstation via a USB data cable. The mounting
      base is freely movable and can be positioned on the workstation
      surface according to the individual worker’s preference.

      The [XXXX] scanner is positioned on the workstation surface adjacent
      to the monitor and data input devices (keyboard/mouse). The specific
      positioning of the Scanner can be adjusted according to the individual
      worker’s preference.

Id.

       In its technical evaluation of ARxIUM’s proposal, the agency analyzed each of
its minimum requirements and reproduced the letters and exchanges above. With
regards to requirement #23, DLA noted that the screenshot from the third reply
“displays First Fill Image and Electronic Rx when these items are transmitted from
CHCS,” and determined that ARxIUM’s proposal met the requirement and was
technically acceptable. AR at 434. Concerning the nesting station requirement,
DLA explained that ARxIUM proposed “a [XXXX] scanner, mounted to a table, and
attached to a workstation,” which DLA found to meet the nesting station definition
from the RFQ and, hence, to satisfy the requirement. AR at 482.

      Both ARxIUM’s and Innovation’s proposals were deemed technically
acceptable by the agency. AR at 482, 570. ARxIUM’s final price at the closing of
best and final offers on February 9, 2017, was $4,487,573.68, while Innovation’s was
$4,494,706.74. AR at 573. Accordingly, ARxIUM was selected for the award on
February 17, 2017. AR at 574.

C. The GAO Protest and Corrective Action

       Innovation challenged the award to ARxIUM by filing a protest with the GAO
on February 27, 2017. AR at 23. Innovation contended that ARxIUM did not have
an FSS contract when the quotes were due, AR at 30–32; that ARxIUM did not
meet minimum requirement #23, the “first fill image” requirement, AR at 33–35;
that ARxIUM did not meet minimum requirement #29 because its solution did not
have the requisite printing capabilities, AR at 35–36; that ARxIUM did not meet
minimum requirement #32 because its system did not place prescriptions directly
into a container, AR at 36–38; that ARxIUM did not meet minimum requirement

                                        -5-
#33, a tote grouping requirement, AR at 39; that ARxIUM failed to provide the
requisite “nesting stations,” AR at 40–44; that ARxIUM did not meet the
requirement to provide “robotic arms,” AR at 44–45; and that the capabilities
described in ARxIUM’s proposal were not commercially available at the time of
submission, in violation of RFQ requirements, AR at 46–47.

       On June 6, 2017, the GAO issued its decision, denying the protest in part and
sustaining it regarding the “first fill image” and “nesting station” requirements. AR
at 1202. Concerning requirement #23, Innovation maintained that the “first fill
images” of written prescriptions presented at Air Force retail pharmacy sites were
scanned and stored in a server using its proprietary PharmASSIST Symphony
Workflow Software (Symphony), which ARxIUM could not access. AR at 1204. The
GAO rejected DLA’s argument that vendors were not required to retrieve first fill
images to meet requirement #23, and that the viewing of these images was
contingent on the images being provided by the Air Force. Id. at 1204–05.
Although DLA merely repeated requirement #23 when asked by a potential vendor
to clarify whether retrieval of these images was required, the GAO found it “implicit
in the requirement to view the first fill image that the pharmacist will necessarily
need to retrieve the image as well.” AR at 1205. The GAO concluded that because
ARxIUM had not indicated how it could retrieve or otherwise create the image data,
its proposal was deficient with regards to this requirement. Id.

       As for the “nesting station” requirement, the GAO decision stated that
Innovation had claimed “the term ‘nesting station’ is an industry standard term
that describes a device into which the totes are placed for purposes of reading the
identifying information.” AR at 1206. After stating that “the record shows that
[nesting station] is an industry standard term,” the GAO noted that ARxIUM had
described the term as “‘a system fixture utilized to identify processing totes at a
workstation via an RFID reader that scans an RFID chip attached to the tote.’” Id.
at 1207 (quoting AR at 481). The GAO concluded that DLA improperly allowed
ARxIUM to provide a solution that was “functionally equivalent” rather than
employing the “particular hardware configuration” of a nesting station “as
understood in the industry.” AR at 1206–07. Therefore, the GAO sustained this
part of the protest as well, and recommended that the agency amend the RFQ to
“relax” these two requirements, if possible, or otherwise terminate the award to
ARxIUM and issue the delivery orders instead to Innovation. AR 1207–08.

      The Air Force then determined that it could not relax requirement #23 to
eliminate the retrieval requirement which GAO found implicit in the RFQ. AR at
1220. In a re-evaluation of ARxIUM’s proposal, the Air Force stated that 41% of its
prescriptions consist of hardcopy images that are scanned directly into Innovation’s
Symphony database, and these images cannot be sent back to the Air Force’s CHCS.
AR at 1220. The Air Force noted it lacked “the manpower to print/scan images from

                                        -6-
Symphony” for use in another database. Id. The Air Force concluded that ARxIUM
could not retrieve first fill images from the Symphony database because Symphony
was proprietary to Innovation, and thus was not acceptable for award. Id.

       Because the Air Force determined that requirement #23 could not be relaxed
and that ARxIUM could not meet this requirement as it was now interpreted, the
Air Force found it was unnecessary to amend the “nesting station” requirement. AR
at 1220. Applying the GAO interpretation of “nesting station,” the Air Force
concluded that ARxIUM had not provided “nesting stations” but only a functional
equivalent, and therefore ARxIUM’s proposal was technically unacceptable. AR at
1221. On September 1, 2017, DLA revised its evaluation of the ARxIUM proposal in
light of the GAO’s decision. AR at 1222–26. The agency found, concerning
requirement #23, that ARxIUM had “not demonstrated that it has the ability to
retrieve [a first fill image] from Innovation’s proprietary database,” as its proposal
instead assumed the images could be retrieved from the Air Force’s CHCS. AR at
1224. Regarding the other requirement at issue, DLA stated that “[a] Nesting
Station is composed of a Nesting Reader, which reads an RFID chip, attached to a
tote basket.” AR at 1225. It then found that ARxIUM’s offer was technically
unacceptable “[b]ecause Arxium did not offer a Nesting Reader, which reads RFID
chips, but instead offered a [XXXX] reader.” Id. After ARxIUM was excluded from
the competitive range, AR at 1227, the contract was awarded to Innovation, as the
only remaining offeror. AR at 1231–32.

D. The Complaint

       On October 2, 2017, ARxIUM filed its bid protest in our court, challenging its
exclusion from the competitive range and the award made to Innovation. Compl. at
1. It alleges that the GAO decision was flawed concerning the nesting stations
requirement, Compl. ¶¶ 48–59, and the first fill images requirement, id. ¶¶ 60–68,
and that DLA’s corrective action was improper in several respects, id. ¶¶ 69–85.
Plaintiff raises five separate counts. First, it argues that DLA’s corrective action
was arbitrary, because this relied on an irrational GAO decision. Compl. ¶¶ 87–94.
Second, it maintains that the corrective action was arbitrarily overbroad, failing to
properly consider amending the RFQ and reopening discussions. Id. ¶¶ 95–99.
Third, it contends that DLA’s reevaluation of its proposal was arbitrary and
insufficiently documented. Id. ¶¶ 100–05. The fourth count is that unstated
evaluation criteria were applied in the competitive range determination. Id.
¶¶ 106–08. And finally, ARxIUM contends that the corrective action resulted in an
improper sole source award. Id. ¶¶ 109–11.

      After an administrative record consisting of 71 tabs and more than 1,400
pages was filed and amended, the parties each filed motions for judgment on the
administrative record. In its motion, ARxIUM for the most part tracks the

                                         -7-
allegations of its complaint. Plaintiff argues that DLA irrationally relied upon the
GAO decision, which it contends had no support for finding an industry definition of
“nesting station” to displace the one contained in the RFQ, Pl.’s Mem. of Law in
Support of Mot. for J. on Admin. R. (Pl.’s Br.) at 8–15; had improperly interpreted
requirement #23 and irrationally failed to decide the issue of the Air Force’s rights
to the first fill image data, id. at 15–22; and should have instead dismissed
Innovation’s protest as an untimely challenge to solicitation terms, id. at 22–24
(citing Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314 (Fed. Cir.
2007)). Plaintiff also argues that DLA’s corrective action was irrational because it
followed the recommendation of the GAO, without properly considering such
matters as whether the relevant RFQ terms were ambiguous, whether revised
quotations and discussions should have been allowed due to the changed
interpretation of these terms, and the extent of the rights the Air Force had to the
first fill images. Id. at 24–25. And ARxIUM contends that DLA’s corrective action
was arbitrary because DLA itself did not consider whether the recommended action
was appropriate and whether the RFQ could be amended, Pl.’s Br. at 27–28;
because the agencies did not properly determine the government’s rights to the first
fill images and the definition of nesting stations, and thus were applying unstated
evaluation criteria, id. at 29–31; and because DLA was essentially making a sole
source award without following the proper procedures, id. at 32–33 (citing 48 C.F.R.
§ 6.303-1).2

        In their cross-motions, the government and intervenor rebutted ARxIUM’s
points, arguing that the GAO’s determination that ARxIUM failed to meet the
minimum requirements was rational, that the agency’s corrective action was
reasonable and appropriate, and that the action did not prejudice plaintiff. Def.’s
Cross-mot. for J. on Admin. R. (Def.’s Br). at 13–40; Def.-Int.’s Cross-Mot. for J. on
Admin. R. (Int.’s Br.) at 4–25. After reply papers were filed, see Pl.’s Reply in Supp.
of Mot. for J. on Admin. R. (Pl.’s Reply); Def.’s Reply in Supp. of Cross-Mot. for J. on
Admin. R. (Def.’s Reply); Int.’s Reply in Supp. of Cross-Mot. for J. on Admin. R.
(Int.’s Reply), the Court held a lengthy hearing on the motions, see Tr. (Nov. 15,
2017). This opinion issues after a careful review of the arguments made at the
hearing and in the briefs and the authorities cited, as well as a thorough
consideration of the pertinent documents in the administrative record.3




2 In light of the disposition of this case, the Court finds it unnecessary to address
several of the protest grounds raised by plaintiff.

3The parties were orally informed of the Court’s decision in a status conference in
December, to allow the agencies to prepare their response to the injunctive relief.

                                          -8-
                              II. DISCUSSION

A. Legal Standards

      1. Judgment on the Administrative Record in a Bid Protest

      The Administrative Dispute Resolution Act (ADRA) amendments to the
Tucker Act require our court to follow Administrative Procedure Act (APA)
standards of review in bid protests. 28 U.S.C. § 1491(b)(4). Those standards,
incorporated by reference, provide that a:

      reviewing court shall . . . (2) hold unlawful and set aside agency action,
      findings, and conclusions found to be -- [¶] (A) arbitrary, capricious, an
      abuse of discretion, or otherwise not in accordance with law; [¶] (B)
      contrary to constitutional right, power, privilege, or immunity; [¶] (C) in
      excess of statutory jurisdiction, authority, or limitations, or short of
      statutory right; [¶] (D) without observance of procedure required by law;
      [¶] (E) unsupported by substantial evidence in a case subject to sections
      556 and 557 of this title or otherwise reviewed on the record of an agency
      hearing provided by statute; or [¶] (F) unwarranted by the facts to the
      extent that the facts are subject to trial de novo by the reviewing court.
      In making the foregoing determinations, the court shall review the
      whole record or those parts of it cited by a party, and due account shall
      be taken of the rule of prejudicial error.

5 U.S.C. § 706 (2012).

       Based on an apparent misreading of the legislative history, see Gulf Grp., Inc.
v. United States, 61 Fed. Cl. 338, 350 n.25 (2004), the Supreme Court had
determined, before the 1996 enactment of the ADRA, that the de novo review
standard of 5 U.S.C. § 706(2)(F) does not usually apply in review of informal agency
decisions --- decisions, that is, such as procurement awards. See Citizens to Pres.
Overton Park, Inc. v. Volpe (Overton Park), 401 U.S. 402, 415 (1971). Instead,
courts in those cases are supposed to apply the standard of 5 U.S.C. § 706(2)(A):
whether the agency’s acts were “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” See Overton Park, 401 U.S. at 416 (citation
omitted); see also Alpine PCS, Inc. v. United States, 878 F.3d 1086, 1099 (Fed. Cir.
2018) (applying 5 U.S.C. § 706(2)(A)). But see Impresa Construzioni Geom.
Domenico Garufi v. United States (Domenico Garufi), 238 F.3d 1324, 1332 n.5 (Fed.
Cir. 2001) (also citing 5 U.S.C. § 706(2)(D) as applicable in bid protests). The “focal
point for judicial review” is usually “the administrative record already in existence,”
Camp v. Pitts, 411 U.S. 138, 142 (1973), even when the matter under review was
not the product of a formal hearing. See Fla. Power & Light Co. v. Lorion, 470 U.S.

                                         -9-
729, 744 (1985); Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1379 (Fed.
Cir. 2009).

       A motion for judgment on the administrative record under RCFC 52.1 differs
from motions for summary judgment under RCFC 56, as the existence of genuine
issues of material fact does not preclude judgment on the administrative record.
See Bannum, Inc. v. United States, 404 F.3d 1346, 1355–57 (Fed. Cir. 2005); Eco
Tour Adventures, Inc. v. United States, 114 Fed. Cl. 6, 21-22 (2013); Fort Carson
Supp. Servs. v. United States, 71 Fed. Cl. 571, 585 (2006). Rather, a motion for
judgment on the administrative record examines whether the administrative body,
given all the disputed and undisputed facts appearing in the record, acted in a
manner that complied with the legal standards governing the decision under
review. See Fort Carson, 71 Fed. Cl. at 585; Greene v. United States, 65 Fed. Cl.
375, 382 (2005); Arch Chems., Inc. v. United States, 64 Fed. Cl. 380, 388 (2005); Eco
Tour, 114 Fed. Cl. at 21–22; McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402
(2013). Factual findings are based on the evidence in the record, “as if [the court]
were conducting a trial on the record.” Bannum, 404 F.3d at 1357; see also
Carahsoft Tech. Corp. v. United States, 86 Fed. Cl. 325, 337 (2009); Gulf Grp., 61
Fed. Cl. at 350.

       Under the “arbitrary and capricious” standard, this court considers “whether
the decision was based on a consideration of the relevant factors and whether there
has been a clear error of judgment” by the agency. Overton Park, 401 U.S. at 416.
Although “searching and careful, the ultimate standard of review is a narrow one.
The court is not empowered to substitute its judgment for that of the agency.” Id.
This court will instead look to see if an agency has “examine[d] the relevant data
and articulate[d] a satisfactory explanation for its action,” Motor Vehicle Mfrs. Ass’n
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), and “may not supply a
reasoned basis for the agency’s action that the agency itself has not given.”
Bowman Transp., Inc. v. Ark.–Best Freight Sys., Inc., 419 U.S. 281, 285–86 (1974).
This court must determine whether “the procurement official’s decision lacked a
rational basis.” Domenico Garufi, 238 F.3d at 1332 (adopting APA standards
developed by the D.C. Circuit); see also Delta Data Sys. Corp. v. Webster, 744 F.2d
197, 204 (D.C. Cir. 1984). A second ground for setting aside a procurement decision
is when the protester can show that “the procurement procedure involved a
violation of regulation or procedure.” Domenico Garufi, 238 F.3d at 1332. This
showing must be of a “clear and prejudicial violation of applicable statutes or
regulations.” Id. at 1333 (quoting Kentron Haw., Ltd. v. Warner, 480 F.2d 1166,
1169 (D.C. Cir. 1973)).

       Under the first rational basis ground, the applicable test is “whether ‘the
contracting agency provided a coherent and reasonable explanation of its exercise of
discretion.’” Domenico Garufi, 238 F.3d at 1333 (quoting Latecoere Int’l, Inc. v. U.S.

                                         - 10 -
Dep’t of Navy, 19 F.3d 1342, 1356 (11th Cir. 1994)). This entails determining
whether the agency “entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence before the
agency,” or made a decision that was “so implausible that it could not be ascribed to
a difference in view or the product of agency expertise.” Ala. Aircraft Indus., Inc.–
Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting Motor
Vehicle Mfrs. Ass’n, 463 U.S. at 43).

       Because of the deference courts give to discretionary procurement decisions,
“the disappointed bidder bears a heavy burden of showing that the [procurement]
decision had no rational basis.” Domenico Garufi, 238 F.3d at 1333 (internal
quotation marks omitted) (quoting Saratoga Dev. Corp. v. United States, 21 F.3d
445, 456 (D.C. Cir. 1994)). The protester must demonstrate, by a preponderance of
the evidence, the absence of any rational basis for the agency decision. See
Enhanced Veterans Solutions, Inc. v. United States, 131 Fed. Cl. 565, 578 (2017);
Harkcon, Inc. v. United States, 132 Fed. Cl. 697, 700 (2017); Overstreet Elec. Co. v.
United States, 59 Fed. Cl. 99, 117 (2003). If arbitrary action is found as a matter of
law, this court will then decide the factual question of whether the action was
prejudicial to the bid protester. See Bannum, 404 F.3d at 1351–54.

        The interpretation of a solicitation, as that of contract provisions generally, is
a question of law which courts review de novo. NVT Techs., Inc. v. United States,
370 F.3d 1153, 1159 (Fed. Cir. 2004); Banknote Corp. of Am., Inc. v. United States,
365 F.3d 1345, 1353 (Fed. Cir. 2004). Whether a provision in a solicitation is
ambiguous, and whether an ambiguity is latent or patent, are also questions of law
over which courts exercise independent review on a case-by-case basis. NVT Techs.,
370 F.3d at 1159; Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 997 (Fed. Cir.
1996). When interpreting a solicitation, the document must be considered as a
whole and interpreted in “a manner that harmonizes and gives reasonable meaning
to all of its provisions.” Banknote Corp., 365 F.3d at 1353; NVT Techs., 370 F.3d at
1159. If the provisions are clear and unambiguous, the court must give them “their
plain and ordinary meaning.” Banknote Corp., 365 F.3d at 1353 (citation omitted).

      2. Injunctive Relief

       In a bid protest, our court has the power to issue a permanent injunction
pursuant to 28 U.S.C. §1491(b)(2). In determining whether to grant a motion for a
permanent injunction, the court applies a four-factored standard, under which a
plaintiff must show: 1) that it has actually succeeded on the merits; 2) that it will
suffer irreparable harm if the procurement is not enjoined; 3) that the harm
suffered by it, if the procurement action is not enjoined, will outweigh the harm to
the government and third parties; and 4) that granting injunctive relief serves the
public interest. Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir.

                                          - 11 -
2009); PGBA, LLC v. United States, 389 F.3d 1219, 1228–29 (Fed. Cir. 2004); Mobile
Med. Int’l Corp. v. United States, 95 Fed. Cl. 706, 742–43 (2010). None of the four
factors, standing alone, is dispositive; thus, “the weakness of the showing regarding
one factor may be overborne by the strength of the others.” FMC Corp. v. United
States, 3 F.3d 424, 427 (Fed. Cir. 1993); AshBritt, Inc. v. United States, 87 Fed. Cl.
344, 378 (2009). Conversely, the lack of an “adequate showing with regard to any
one factor may be sufficient, given the weight or lack of it assigned the other
factors,” to deny the injunction. Chrysler Motors Corp. v. Auto Body Panels, Inc. v.
United States, 908 F.2d 951, 953 (Fed. Cir. 1990). A lack of success on the merits,
however, obviously precludes the possibility of an injunction. See Wind Tower
Trade Coalition v. United States, 741 F.3d 89, 101 (Fed. Cir. 2014); Tech Sys., Inc. v.
United States, 98 Fed. Cl. 228, 268 (2011); Gulf Grp., 61 Fed. Cl. at 364.

B. Analysis

       The first count in ARxIUM’s bid protest, Compl. ¶¶ 87–94, and its first two
arguments for judgment on the administrative record, Pl.’s Br. at 8–25, concern the
propriety of the GAO’s decision to recommend corrective action. At first glance, this
might seem like the logical place for our analysis to begin, as the GAO decision
rested on its interpretations of terms in the request for quotations, AR at 1203–08,
and such matters are question of law reviewed de novo, see NVT Techs., 370 F.3d at
1159; CBY Design Builders v. United States, 105 Fed. Cl. 303, 342 (2012) (citing
Banknote Corp., 365 F.3d at 1352–53, and Galen Med. Assocs., Inc. v. United States,
369 F.3d 1324, 1329 (Fed. Cir. 2004)). Moreover, were it not for the GAO sustaining
(in part) Innovation’s protest, DLA would have had no cause to revisit its decision to
award the delivery orders to ARxIUM.

       But the corrective action recommended by the GAO was not that the agency
necessarily drop its interpretation of these terms in favor of those articulated by the
GAO. AR at 1208. Rather, the GAO left it to the agency to determine if the latter
would stick with its own interpretations, which would necessitate a formal
modification and the evaluation of revised proposals, or follow the GAO
interpretations, which would result in a termination of the award to ARxIUM and
the issuance of the delivery orders to Innovation. Id. While even the road foregone
could have been protested by ARxIUM, as requiring it to compete a second time for
an award it already secured, see Sys. Appl. & Techs., Inc. v. United States, 691 F.3d
1374, 1382 (Fed. Cir. 2012) (citing CBY Design Builders, 105 Fed. Cl. at 337), this
element of choice made the corrective action more akin to the result of an agency
protest, see 48 C.F.R. § 33.103. The specific action aggrieving ARxIUM was not
merely the result of “an agency’s decision to follow a GAO recommendation,” Turner
Constr. Co. v. United States, 645 F.3d 1377, 1383 (Fed. Cir. 2011), but was due to a
separate determination of the agency, see AR at 1222–27. Under these


                                         - 12 -
circumstances, it seems more appropriate to begin the analysis with the procuring
agency decision.

       The ultimate decision being challenged is the Contracting Officer’s removal of
plaintiff from the competitive range, AR at 1227, due to DLA’s determination that
ARxIUM’s proposal was technically unacceptable when measured against the GAO
interpretations of the first fill image and nesting stations requirements, AR at
1222–26. Neither of these documents created by DLA---the Competitive Range
Determination and the revised technical evaluation of ARxIUM’s proposal upon
which it was based---discusses whether the agency could “amend the RFQ to relax”
the two requirements in question, see id., although this option was the first part of
the GAO recommendation, AR at 1208. It appears that DLA referred that decision
to the customer for whom it was placing the orders, as the record contains a
memorandum from the Air Force to the DLA which discusses that aspect of the
GAO recommendation. AR at 1220–21.4

      1. Requirement #23 Regarding First Fill Images

         The Air Force memorandum never reaches the issue of whether the nesting
stations requirement could be “relaxed” or amended, because the Air Force did “not
find it acceptable to amend technical requirement #23” regarding the first fill image
for prescriptions. Id. at 1220. The reason the Air Force would not agree to amend
the first fill image requirement was its belated discovery that these images were
kept in Innovation’s Symphony system and could not be received by the Air Force’s
Composite Healthcare System (CHCS). Id. The Air Force stated its determination
was “[b]ased on more thorough information regarding the [CHCS’s] ability to
receive the first fill image,” and later explained that “CHCS is unable to receive
images.” Id. According to the Air Force, 41% of prescriptions are “hardcopy
prescriptions” from an “external provider” that “are scanned directly into
Symphony.” Id. The Air Force noted that the volume of these hardcopy
prescriptions ranges from 123,000 to 396,000 at the four refill centers, and that it
did “not have the manpower to print/scan images” of this magnitude to enable them
to be imported into another system. Id.5 It concluded:

      Since the image is not in CHCS, the only vendor capable of retrieving
      it is one that has access to Symphony. Since Symphony is proprietary

4The Court is not persuaded by ARxIUM’s arguments, see Pl.’s Br. at 28, that it
was improper for DLA to refer this matter to the Air Force, or that DLA was not
aware of this Air Force memorandum addressed to it, see AR at 1220.

5The numbers asserted by the Air Force are not supported in the record, but the
Court finds no reason to doubt them.

                                        - 13 -
      to Innovation, Arxium does not have the capability to retrieve first fill
      images that are scanned into Symphony and thus they are
      unacceptable.

AR at 1220.

       Thus, the Air Force decided to follow the GAO interpretation of requirement
#23, namely that offerors must either show that they can retrieve first fill images
from the particular location in which the images are stored, or show “an alternative
means” of “creating new first fill images.” AR at 1205. Because the images are
stored in Innovation’s proprietary system, and the Air Force apparently lacked the
resources to copy them to another location, the Air Force decided that to “relax” the
requirement “would allow a system incapable of retrieving the first fill image to be
found acceptable that would seriously impact pharmacy refill centers’ operations.”
Id. at 1220. It then applied the GAO interpretation to ARxIUM’s proposal and
found it unacceptable, a judgment that was repeated by the DLA in its reevaluation,
id. at 1224, and in its decision to remove plaintiff from the competitive range, id. at
1227.

       The problem with these determinations, though, is that the reason that
plaintiff had “not demonstrated that it has the ability to retrieve [a first fill image]
from Innovation’s proprietary database,” id. at 1224, is that demonstrating such an
ability had not been requested by the agency. In relevant part, requirement #23
states “[w]hen verifying prescriptions, the solution shall allow the pharmacist to
view the first fill image of the original written prescription.” AR at 201. The
requirement does not specify that this image must be retrieved from a particular
database, let alone one which is proprietary. The RFQ contains no discussion of any
databases in which information is kept, see AR at 196–200, 318–33, and the only
specific system mentioned in the requirements is CHCS, see id. at 329–31
(requirements #5, 7, 9–11, 35).6 Other than CHCS, the RFQ requirements make
several references to generic, commercial off-the-shelf (COTS) systems, as in: “The
pharmacy automation solution shall interface with the Composite Healthcare
System (CHCS) and other commercial off-the-shelf (COTS) pharmacy systems.” Id.
at 329 (requirements #5 & 35); see also id. (requirements #6, 7, 9–11).7 Thus, no


6 The equipment currently located at the four refill centers, but not the software or
databases, is identified in the RFQ, see AR at 235, 239, 242–43, 246. The systems
used at outpatient pharmacies are not discussed at all. See AR at 322.

7 As ARxIUM points out, its proposal stated that its solution was “capable of
interfacing with other COTS systems.” Pl.’s Br. at 29 n.8 (citing AR at 703.4); see
also Tr. at 27 (Nov. 15, 2017) (Tr.).

                                         - 14 -
indication was given that the ability to view first fill images would require access to
intervenor’s proprietary database.

       While it is “rare” for our court to find that an agency’s decision was arbitrary
because “the agency ‘entirely failed to consider an important aspect of the problem,”
CBY Design Builders, 105 Fed. Cl. at 344 (quoting Ala. Aircraft, 586 F.3d at 1375
(quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43)), the record shows that this is
just such a case. Indeed, the procuring agency, its client, and the GAO all failed to
consider several important aspects of the corrective action ultimately taken by DLA,
all arising from the RFQ’s failure to mention that first fill images are stored in a
particular contractor’s proprietary database.

        First, no consideration was given to the possibility that plaintiff could meet
the first fill image requirement, as interpreted by the GAO, in a revised proposal
once the interpretation of this provision was settled. The Air Force concluded that
“only Innovation Associates can meet technical requirement #23 as written,”
because the images are stored in Symphony and “Symphony is proprietary to
Innovation.” AR at 1220. And as we have seen, DLA found ARxIUM’s proposal
technically unacceptable because plaintiff did not show it could retrieve first fill
images “from Innovation’s proprietary database.” AR at 1224. Neither agency
explains why it is significant that the software used for the database in which the
first fill images are stored is proprietary to intervenor. If the government’s position
is that only Innovation can access data stored in this database, and thus only
intervenor can be technically acceptable, then plaintiff would be entitled to an
award of its bid preparation and proposal costs, for having been unfairly induced
into believing that an actual competition was being conducted. See Centech Grp.,
Inc. v. United States, 79 Fed. Cl. 562, 564, 577 (2007) (holding that offeror may be
entitled to bid preparation costs that were “wasted” due to agency’s error in
interpreting solicitation requirement); cf. Concept Automation, Inc. v. United States,
41 Fed. Cl. 361, 369–70 (1998) (awarding bid preparation costs to offerors when
“misleading solicitation” resulted in a contract award using “rules [that] had been
covertly changed”).

        The Court presumes that the Air Force and DLA were relying on the
arguments made by Innovation before the GAO, and the supporting declaration
from an Innovation employee. See AR at 34–35, 168–69; see also Def.’s Br. at 22;
Int.’s Br. at 15–16. The employee stated that the Symphony software Innovation
was proposing for use at the refill centers could connect to the Symphony systems
into which the first fill images were scanned at outpatient pharmacies, but that “no
mechanism” allows the Symphony outpatient systems to transmit images to non-
Symphony systems. AR at 169. He added that plaintiff had not “ever requested
access to Innovation’s Symphony databases.” Id. Based on this, Innovation argued
that “[w]ithout such access granted by Innovation,” the ARxIUM system “cannot

                                         - 15 -
receive first fill images from out-patient retail sites that use Innovation’s Symphony
system to store first fill images.” AR at 35.

       But these statements and arguments hardly establish that it was within
Innovation’s power to decide who had access to the first fill images and, thus, who
could compete with it for this particular contract. Since the RFQ did not inform
potential offerors of the need to show the ability to access data kept in a Symphony
database, ARxIUM had no reason to approach Innovation to request access to the
database or to pursue a “mechanism” to connect with it.8 But by taking an
interested party’s word for it, the government again entirely failed to consider a
number of important aspects of the problem of whether ARxIUM could propose
retrieval of these images. As plaintiff points out, under provisions of the Defense
Federal Acquisition Regulation Supplement (DFARS), the first fill images might be
“technical data” which the government had an unrestricted right to use for its
purposes. Pl.’s Br. at 19–21 (citing, inter alia, 48 C.F.R.§§ 227.7102-4(a)(1);
252.227-7013(a)(1), (15); 252.227-7015(a)(5), (b)(1)(iv)). Although the question of the
Air Force’s intellectual property rights in this data was flagged by the GAO, see AR
at 1205–06 n.4, neither the Air Force nor DLA considers this, or any other rights
the government might have under the contract(s) through which the images are
scanned into Symphony at the outpatient retail pharmacies. The government
cannot rationally conclude that the storage of these images in the Symphony
database impedes its access and that of its contractors to the images, without
considering the rights and responsibilities established by the contract(s) under
which the images are scanned and stored.

       Of course, electronic access to the Symphony database is not the only means
by which first fill images may be obtained for use at the refill centers. The GAO
decision noted that the ARxIUM proposal did not show “that it was offering an
alternative means either of retrieving the currently extant first fill images or
creating new first fill images.” AR at 1205.9 On this score, the Air Force considered
that it did “not have the manpower to print/scan images from Symphony for import

8 The Court notes that the exhibit filed with the GAO to show that the
PharmASSIST Symphony system was an “approved system of record” used to store
copies of first filled images, appears to be a notice that was circulated internally
among Air Force outpatient pharmacies, and not a document designed to notify the
public of this system. See AR at 174.

9 The GAO also noted that plaintiff omitted information showing “that such an
alternative means has been approved as an alternative system of record.” AR at
1205. Since the RFQ does not restrict quotations to offerors with such an approved
system of record, this consideration is irrelevant to the procurement.


                                        - 16 -
into another COTS system,” AR at 1220, but entirely ignored the possibility that
ARxIUM could propose to do this. The procuring agency, DLA, did not at all
consider the possibility of anyone printing and scanning these images, and instead
focused on plaintiff ’s mistaken belief that the images could be retrieved from CHCS.
See AR at 1222–24.

        The record shows that the government itself had earlier held the same
mistaken view concerning the transmittal of first fill images from CHCS. After
several rounds of discussions, during which two inquiries were made to plaintiff
concerning requirement #23, DLA concluded that ARxIUM’s “proposed solution
displays First Fill Image and Electronic Rx when these items are transmitted from
CHCS,” and thus “meets this requirement and has been determined to be
technically acceptable.” AR at 434 (emphasis added). And after Innovation
responded to a discussion item with an explanation of how its Symphony program
would allow the refill centers to obtain first fill images from the outpatient
pharmacy systems, DLA found this “further capability” to be beyond the required
“capability to display the first fill image.” AR at 510–11. The agency based this on
its belief that first fill image “data is transmitted to [Innovation’s] system via the
CHCS interface.” AR at 511 (emphasis added).10

       This brings us to another important aspect of the corrective action that the
government entirely failed to consider. After switching to the GAO’s interpretation
of requirement #23---namely, that an offeror must show the ability to retrieve first
fill images from the Symphony database, either by connecting with the database or
through alternative means, AR at 1205---the government applied this to ARxIUM’s
existing proposal, AR at 1220–27, which was the product of lengthy discussions, see
AR at 410–82. As this was an FSS procurement, the formalities of the FAR subpart
governing negotiated procurements did not automatically apply, see 48 C.F.R.
§ 8.404(a)---including FAR subsection 15.306(d), the provision regarding
discussions, see Concourse Grp., LLC v. United States, 131 Fed. Cl. 481, 488 (2017);
IBM Corp. v. United States, 119 Fed. Cl. 145, 157–58 (2014); Distributed Sols., Inc.
v. United States, 106 Fed. Cl. 1, 15–16 (2012); Unisys Corp. v. United States, 89 Fed.
Cl. 126, 139 (2009). Nor did the RFQ---which merely informed vendors that “[t]he
Government may elect to issue an award without discussions,” AR at 197---
incorporate FAR § 15.306 either by reference or by implication through adoption of
a specified procedure. See Distributed Sols., 106 Fed. Cl. at 15; Unisys Corp., 89
Fed. Cl. at 139–40.

10 Although these evaluations were performed by DLA, this was “in conjunction
with the Air Force,” as “[d]uring the evaluation process, the Air Force was consulted
as the end user, and as the expert on pharmacy protocol, pharmacy equipment
knowledge and operation, and to address any concerns during the offer evaluation
process.” AR at 410, 483.

                                         - 17 -
        But our case law has established that discussions held in FSS procurements
may not be arbitrary, and are scrutinized for fundamental fairness. Concourse
Grp., 131 Fed. Cl. at 488 (citing Distributed Sols., 106 Fed. Cl. at 16 n.9); IBM
Corp., 119 Fed. Cl. at 157 (citing Unisys Corp., 89 Fed. Cl. at 140). Decisions have
found the government’s approach to discussions to be fair when the protester’s
“proposal did not contain any potential nonconformities with the solicitation,” IBM
Corp., 119 Fed. Cl. at 158, or was not judged to contain significant weaknesses,
Unisys Corp., 89 Fed. Cl. at 141. Here, at the time discussions were conducted, the
agency believed that first fill images could be obtained from CHCS, and that
offerors need not show the ability to retrieve these images from any other location
in order to meet requirement #23. See AR at 434, 511. If the agency had instead
known that the images were kept in the Symphony database, and had interpreted
requirement #23 the way the GAO ultimately did, its discussions with ARxIUM
would have addressed these matters, as the acknowledged purposes of the
discussions were “to address any concerns during the offer evaluation process” and
to “ensure” that responses “were technically acceptable, or if further
clarifications/discussions were required.” AR at 410, 483. Retroactively applying
the GAO interpretation of requirement #23 to ARxIUM’s proposal renders the
discussions arbitrary and unfair to plaintiff, as it was not afforded the opportunity
to address the failure of its proposal to meet the new interpretation.

       While the GAO recommendation appropriately called for “revised quotations”
were DLA to “relax” the requirements at issue in its decision, AR at 1208, the Air
Force, DLA, and the GAO all failed to consider that the GAO interpretations
amounted to a “tightening” of the requirements relative to their meaning during
discussions. The Court agrees with plaintiff ’s contention that, under these
circumstances, it was arbitrary for the government not to reopen discussions and
accept revised proposals. See Pl.’s Br. at 2, 25; Pl.’s Reply at 25.

       This particular flaw in the corrective action traces back to the GAO’s decision
and recommendation. After finding “implicit” in requirement #23 the ability to
retrieve the first fill images from the database in which they are stored, and then
conditioning this ability on supposed impediments due to the proprietary nature of
the image repository, AR at 1205, the questions of whether this requirement was
ambiguous and whether ARxIUM’s interpretation of it was reasonable should have
been considered when recommending corrective action. The GAO was not presented
with a matter in which express language of a requirement was overlooked by an
agency and an offeror. Instead, the requirement being interpreted was that “the
solution shall allow the pharmacist to view the first fill image of the original
prescription.” AR at 329. Again, nothing is said about retrieval from a particular
database, let alone one which was proprietary to Innovation.


                                        - 18 -
       Rejecting the agency’s interpretation, the GAO explained that “the words
‘when available or when provided by the Air Force’ are not found in the RFQ’s
statement of minimum requirements.” AR at 1204 n.3.11 But the need to retrieve
the images from the particular database in which they are stored was also not
expressed. And the GAO acknowledged that, when asked by an offeror to “clarify if
the solution must be capable of retrieving the ‘first fill image’ from the system used
at the outpatient pharmacy,” see AR at 322, the agency “just restated the RFQ’s
requirement, which did not address whether the system had to be capable of
retrieving the image,” AR at 1205. Thus, not only does the requirement not
mention retrieval from the system database, but the agency refused the opportunity
to make such an interpretation clear.

        As the plain text of the requirement does not unambiguously require
retrieval from the pharmacy system database, the reasonableness of the
interpretation proffered by ARxIUM should have been considered by the GAO. See
Banknote Corp., 365 F.3d at 1353. The only specific system identified in the RFQ
was CHCS. See AR at 329–31. The language of other requirements is consistent
with an interpretation of requirement #23 which does not require offerors to show
that data can be retrieved from a particular, proprietary database. To meet
requirement #5, offerors had to show the ability of their solution to “interface” with
CHCS “and other commercial off-the-shelf (COTS) pharmacy systems.” AR at 329.
The special need to retrieve data from a particular COTS system is not mentioned.
The next requirement concerns the “order entry workstation” required at two of the
refill centers. Instead of stating that the solution must retrieve images, the
requirement states that it “shall capture a digital image of the provider’s written
prescription by accepting the digital image from the COTS pharmacy system.” Id.
(emphasis added). This seems to place the onus on the COTS pharmacy system to
deliver the data, rather than on the refill center system retrieving it.

       Extrinsic evidence in the record further supports the reasonableness of
ARxIUM’s interpretation. A Request for Information (RFI) was posted by DLA
during the market research phase of the procurement “to determine the physical
and technical capabilities of commercial pharmacy automated dispensing systems
currently available in the market place.” AR at 580. One question asked vendors if
their systems were “able to accept a B2K (uni-directional) CHCS interface.” AR at
581. Another began with the premise: “Upon receiving information from CHCS or a

11 As the GAO protest concerned the interpretation of terms in the RFQ, rather
than the claim that the terms were unlawful, ARxIUM is wrong in its assertion, see
Pl.’s Br. at 22–24, that the protest was untimely under Blue & Gold Fleet.
Likewise, Innovation’s argument that ARxIUM should somehow have challenged
the application of the new GAO interpretation earlier than it was applied, see Int.’s
Br. at 18–19, is not availing.

                                        - 19 -
COTS pharmacy system, the system shall automatically fill a prescription.” Id.
(emphasis added). Both of these questions suggested that the agency was looking
for a system that was to be receiving data it made available, not retrieving the data
from a special source. And the specific question that concerned verification using
the first fill image asked if a system would “allow the pharmacist to view the image
of the original written prescription,” again with no reference to the need to retrieve
the image from a particular location. AR at 582.12

       Innovation argues that the “GAO adopted the only reasonable interpretation
of Requirement 23 when read in the context of the RFQ as a whole.” Int.’s Br. at 9.
This interpretation, however, rested on neither the text of the RFQ nor the
information in the record that was considered by the agency when it drafted the
RFQ, but instead on information about the Symphony system provided by
Innovation in its protest. See AR at 1204–05. Curiously, the government also
argues that the GAO interpretation was “the only reasonable reading of the
requirement,” Def.’s Br. at 20, although, as we have seen, the agency had previously
read it not to require retrieval from a particular database, see AR at 511. The
government’s initial interpretation of requirement #23 was adopted, to be sure,
before it had received “more thorough information regarding the Composite
Healthcare System’s (CHCS) ability to receive the first fill image,” AR at 1220, but
this placed it on the same footing as ARxIUM and all other vendors other than
Innovation, who had no reason to know that the images were stored in a particular
proprietary database.

       Taking into consideration that the RFQ did not notify vendors that the
images were stored in a proprietary database; that the agency declined to clarify
whether retrieval was required; that the agency believed the images could be
transmitted by CHCS and interpreted the provision as not requiring retrieval from
another source; and that the RFI and RFQ discuss accepting and receiving
information, but not retrieving it, the Court concludes that plaintiff’s interpretation
of requirement #23 was within the “zone of reasonableness,” NVT Techs., 370 F.3d
at 1162 (citation omitted), making the requirement ambiguous.

       Since ARxIUM’s interpretation of requirement #23 was reasonable, any
resulting ambiguity is construed against the government as drafter, unless the
ambiguity was patent and the corresponding duty to inquire was not satisfied. Id.
A patent ambiguity is “an obvious error in drafting, a gross discrepancy, or an
inadvertent but glaring gap.” WPC Enters. v. United States, 163 Ct. Cl. 1, 6 (1963).
But the absence of language concerning the need to retrieve first fill images from a

12 The Court further notes that the RFI asked vendors if their systems interface
with several, named “commercial pharmacy systems,” not one of which was the
PharmASSIST Symphony system. See AR at 584.

                                         - 20 -
particular proprietary database was not the sort of “obvious, gross, or glaring”
ambiguity that is patent. NVT Techs., 370 F.3d at 1162 (citing H & M Moving, Inc.
v. United States, 204 Ct. Cl. 696, 716 (1974)). The RFQ contains no discussion of
any “system of record” holding these images, see AR at 196-200, and the
requirements that concern a “COTS pharmacy system” discuss “accepting” or
“receiving” information from such systems, not retrieving it, see AR at 329. Nor did
the vendor’s question which sought to clarify whether a retrieval capability was
required mention that the images were stored in a particular, proprietary database,
but merely referred to “the system used at the outpatient pharmacy.” AR at 322.
Even if it turns out that these images are stored in a proprietary database which
poses obstacles to their retrieval, nothing in the RFQ suggests this is the case, and
thus the failure to address retrieval from such a location is not the sort of glaring
gap that would be patent.

       Clearly, the errors detailed above were to ARxIUM’s prejudice, as “there was
a ‘substantial chance’ it would have received the contract award but for the errors.”
Bannum, 404 F.3d at 1353 (citations omitted). The government argues that
plaintiff could not have been awarded the contract, as its proposal assumed it would
obtain the first fill images from CHCS, which is apparently incapable of receiving
and storing them. Def.’s Br. at 41–42; Def.’s Reply at 19–20. But since the RFQ did
not inform vendors that this data was stored in the Symphony database, and
plaintiff reasonably interpreted the requirement not to involve retrieval from a
proprietary database (as did the government when proposals were evaluated, see
AR at 511), the issue is not whether ARxIUM’s existing proposal could be awarded
the contract, but rather whether a revised proposal could. To this point, Innovation
argues that ARxIUM was not prejudiced by the agency’s treatment of requirement
#23, contending that the costs to plaintiff of accessing these images from Symphony
or otherwise collecting them would exceed the price advantage of ARxIUM’s
quotation. Int.’s Br. at 16–17. But whether the scanning and storing of these
images in the Symphony database actually imposes special access costs depends on
several important things that DLA and the Air Force failed to consider, such as the
government’s rights to the data and Innovation’s responsibilities under its other
contract(s), and Innovation is merely speculating as to the costs to ARxIUM to
collect the data through alternative means. Indeed, we cannot know whether the
Air Force and DLA will wish to amend the RFQ to require retrieval of first fill
images from the Symphony database, once they have properly considered these
issues. Plaintiff, having submitted the lowest quotation earlier in the procurement,
certainly has a substantial chance of award once the government properly decides
what it is requiring.




                                        - 21 -
      2. The “Nesting Stations” Requirement

        The other RFQ requirement at issue in this protest concerned “nesting
stations,” which the RFQ defined as “an area on the conveyor system that has a
nesting reader attached to it.” AR at 199. When ARxIUM’s final quotation was
first evaluated, it was found to meet this requirement. AR at 481–82. The GAO
sustained Innovation’s protest of this determination, finding that DLA relaxed the
requirement and allowed ARxIUM to meet it with a “functionally equivalent”
solution. AR at 1206–07. According to the GAO, “nesting station” was shown by
the record to be an “industry standard term,” which was “understood in the industry
as describing a particular hardware configuration.” Id. at 1207. Although the GAO
did not expressly state the meaning of this term, it earlier claimed that “[a]ccording
to the protester, the term ‘nesting station’ is an industry standard term that
describes a device into which the totes are placed for purposes of reading the
identifying information.” AR at 1206.

       The Air Force never reached the issue of whether the RFQ could be formally
amended to “relax” this requirement, because it determined that the first fill image
requirement could not be relaxed. AR at 1220. It instead adopted the purported
industry definition of “nesting station,” and noted that ARxIUM stated that nesting
stations use RFID readers to scan RFID chips attached to totes. AR at 1221. The
Air Force found that plaintiff failed to propose nesting stations, because ARxIUM
“provided a functionally equivalent alternative in which they utilize [XXXX]
scanners to read the [XXXX] tote, and the user must be involved in the reading
process.” Id.

       In its revised technical evaluation, DLA stated that “[a] Nesting Station is
composed of a Nesting Reader, which reads an RFID chip, attached to a tote
basket.” AR at 1225. It claims that ARxIUM “acknowledged this definition,” and
found that plaintiff did not offer anything meeting the requirement, because
plaintiff “did not offer a Nesting Reader, which reads RFID chips, but instead
offered a [XXXX] reader.” Id.; see also AR at 1227 (removing ARxIUM from
competitive range, in part because plaintiff “did not offer Nesting Stations with
Nesting Readers”).

       The crux of this matter is whether DLA and the Air Force require the
prescription information which is attached to a tote---the container holding
medications---to be contained in a RFID chip or would accept it on a [XXXX], and
whether they require these containers to be placed in a basket when the
information is read or scanned. The agencies obviously did not interpret the nesting
stations requirement as precluding [XXXX] scanning and as requiring baskets, as
the discussions with plaintiff and evaluation of its proposal make plain. See AR at
480–82. Although the parties spend a considerable amount of space on this issue,

                                        - 22 -
see Pl.’s Br. at 1, 8–15, 30–31; Int.’s Br. at 6–9, 22–23, 26; Def.’s Br. at 5–7, 14–19,
29, 33, 37–38; Pl.’s Reply at 1–3, 5–10, 20–22; Def.’s Reply at 4–9; Int.’s Reply at 2–
5, the Court will address it briefly, as the government will not be precluded from
amending the RFQ to make clear which of these options are allowable and/or
required.

        The GAO determination that “the record shows” that “nesting station” is an
“industry standard term” is not supported by a citation to the record, see AR at
1207, and the parties have not pointed to anything in the record that suggests such
an industry standard (or recognized term of art) exists. Its earlier statement that
“[a]ccording” to Innovation, “the term . . . is an industry standard term that
describes a device into which the totes are placed,” AR at 1206, is also not supported
by the record, as Innovation made no such claim in its papers and certainly cited no
evidence in support of the proposition, see AR at 40–44, 1151–54. Indeed, as the
RFQ defines “nesting station” as “an area on the conveyor system that has a nesting
reader attached to it,” AR at 199 (emphasis added), it would be peculiar if by “area”
the agencies meant “a device.” It seems that GAO was confusing “tote nest,” which
Innovation stated was the device that holds totes and reads them at the nesting
stations currently in use at the refill centers, see AR at 40–43, with the station
itself.

       Instead of relying on any industry understanding, Innovation contended
before the GAO that “nesting stations” were so called because of the presence of
“tote nests,” which use “nesting readers” to obtain information from totes. AR at
41–43, 1152–53.13 According to intervenor, a nesting station needs a tote nest, and
a tote nest must necessarily hold the object from which the information is obtained.
See id. One problem with this argument, as ARxIUM notes, see Pl.’s Br. at 13 n.2;
Pl.’s Reply at 9, is that during discussions, Innovation took the position that RFID
readers that were “mounted in the conveyor frame,” and which obtain information
from the RFID tags on totes not by holding the totes but by reading the tags as the
totes pass over the devices, “meet the definition of the term Tote Nest as well,” AR
at 1444–45. If a “tote nest” can earn the monicker without holding a tote, it is hard
to see why a “nesting station” or a “nesting reader” necessarily requires a device
that holds a tote. It seems that what makes a tote nest is its ability to read RFID
information from a tote, not whether it holds the tote when it does this.

13 Similarly, during discussions Innovation did not reference any industry standard
or understanding regarding the term, instead stating that in its “proposed solution
the term ‘Nesting Station’ has been interpreted to mean the addition of a tote nest
device to a filling workstation or verification workstation.” AR at 1434. Innovation
went on to explain: “The addition of a tote nest to any workstation gives that
workstation the ability to read an RFID tote in the same way as the addition of a
[XXXX] scanner gives any workstation the ability to read [XXXX].” Id.

                                         - 23 -
        Nor does the language cited by the GAO from one of ARxIUM’s discussion
responses establish or even claim that “nesting station” has a particular meaning in
the industry. See AR at 1207. In that response, plaintiff appears to be describing
the manner in which the existing nesting stations at the refill centers functioned,
identifying tote information “via an RFID reader that scans an RFID chip attached
to the tote.” Id.; see also AR at 481. Regardless of whether the existing system used
a process in which “the technician removes the tote from the conveyor, [and] places
it in the nesting station,” AR at 1207, the point of ARxIUM’s response was that it
“accomplishes this identification process by utilizing the workstation’s desktop
[XXXX] scanner to read a [XXXX] tote ‘license plate’ that is affixed to every tote,”
AR at 481. Because it was proposing a different method of reading the tote
information, plaintiff called its solution a “functional equivalent” to the existing,
RFID-reading nesting stations. AR at 480.

       From ARxIUM’s use of the phrase “functional equivalent,” it seems the GAO
concluded that DLA “essentially” took the position that the plaintiff deviated from
proposing a “nesting station.” AR at 1206–07. But DLA found that ARxIUM
proposed a nesting station that met the RFQ definition. AR at 482. The GAO
essentially faulted ARxIUM for not proposing a device with an RFID reader which
holds a tote while reading the tote’s RFID chip. But DLA informed offerors, during
discussions: “Since the RFQ does not state RFID as a requirement, RFID does not
have to be used. Hence, workstations under RFQ 1019219 do not need to be RFID
tote enabled. As long as your solution can meet all of the requirements
with/without RFID, that solution would be acceptable.” AR at 979, 1450.14 With
the use of RFID technology not required, it is hard to see how a nesting station can
rationally be interpreted as requiring an RFID reader, such as a tote nest. Again,
the RFQ definition of nesting station was “an area on the conveyor system that has
a nesting reader attached to it.” AR at 199. As DLA had made it clear that it was
acceptable for offerors to meet requirements without RFID, AR at 979, ARxIUM’s
use of a [XXXX] scanner to read the tote information needed no relaxation of
requirements.

       As we have seen, there is no support in the record for a finding that “nesting
station” is some sort of term-of-art with a settled understanding in the industry,
such that the Air Force and DLA may have been unwittingly requiring a particular
type of reader by using the term. And evidence in the record contradicts any notion
that the agencies were consciously requesting tote readers that hold the totes while

14 It does not appear that any of the parties drew this language to the attention of
the GAO, although it was contained in Exhibit 22 to the Agency Report. See AR at
979.


                                        - 24 -
reading them. Amendment 0002 to the RFQ included the responses to vendors’
questions. When asked to ‘clarify the term ‘Nesting Station,’” DLA merely repeated
verbatim the definition contained in the RFQ. AR at 325. Another question asked,
“Does ‘Nesting Station’ refer to ‘having the ability to read a tote’?” Id. Rather than
state that the term referred to a reader which holds totes, DLA responded: “If totes
or pucks are quoted, then a nesting station is required to read the totes/pucks.” Id.
And in the initial evaluation of ARxIUM’s quotation, DLA expressed no concern
about whether the nesting station had a device to hold totes when reading them,
but instead wanted to know if the [XXXX] scanner was fixed or handheld. AR at
480–81.

        Because it believed that ARxIUM could not meet the first fill image
requirement, the Air Force chose not to consider amending the RFQ to reflect what
it really expected of “nesting stations.” See AR at 1220. The Air Force instead
followed the GAO’s lead, displacing the RFQ definition of “nesting station” with the
supposed industry definition of “a device into which the totes are placed for
purposes of reading the identifying information,” again with no support. AR at
1221. After citing ARxIUM’s description of the incumbent system, the Air Force
found plaintiff ’s proposal not to contain nesting stations but a “functionally
equivalent alternative in which they utilize [XXXX] scanners to read the [XXXX]
tote, and the user must be involved in the reading process.” Id. What the Air Force
meant by the latter phrase is not clear, as a user’s involvement in holding a tote
under a scanner or in placing it inside a reading device would seem to be
indistinguishable.15

       In any event, DLA’s reevaluation of the ARxIUM proposal said nothing about
a problem with user involvement. It stated that “[a] Nesting Station is composed of
a Nesting Reader, which reads an RFID chip, attached to a tote basket.” AR at
1225. The agency’s only support for this is the claim that plaintiff “acknowledged
this definition in [its] responses” during discussions. Id. But the quoted passage,
discussing the incumbent’s system, says nothing about any “basket,” ambiguously
stating that a “technician removes the tote from the conveyor [and] places it in the
nesting station,” id., which could mean merely putting the tote within the area in
which the reading is to take place. The agency reiterated the conclusion that

15 Innovation argues that the use of a device which holds and reads one tote at a
time is a safety feature, preventing operators from mixing up the totes. Int.’s Br. at
23; Int.’s Reply at 4. But its support is its own argument and a declaration of its
own employee, not of anyone from the agencies. AR at 170–71, 1153. Although it is
hard to see how an operator who is holding a tote in his hands while scanning it
could confuse that tote with others, this is the sort of judgment to which a court
could defer---when made by an agency, that is, and not by one of the competitors.


                                        - 25 -
ARxIUM “offered a functionally equivalent solution” rather than a nesting station,
explaining that because plaintiff “did not offer a Nesting Reader, which reads RFID
chips, but instead offered a [XXXX] reader, [its] offer is technically unacceptable.”
Id.16 Again, since the offerors were told that the use of RFID technology was not
required, that “workstations” as a consequence “do not need to be RFID tote
enabled,” and that a solution “would be acceptable” if it met requirements without
the use of RFID, AR at 979, 1450, it was arbitrary for the agency to base
unacceptability on the absence of RFID readers.

       And as with the first fill image requirement, the retroactive imposition of this
definition results in the discussions being arbitrary and unfair, as plaintiff had not
been informed that its failure to utilize a basket or other type of container, and
failure to use RFID technology, were concerns which would make its proposal
unacceptable. But regarding the nesting stations requirement, it is not known if it
matters to the Air Force and DLA whether offerors use baskets to hold totes for
reading, and they clearly are indifferent to the use of RFID technology.
Nevertheless, it was arbitrary to find ARxIUM’s proposal to be unacceptable on this
ground, when no industry understanding of the term has been rationally identified
to displace the broad definition which plaintiff had been found to meet.17 Since
neither a basket to hold totes nor RFID technology was required by the RFQ, if the
agencies change their minds and decide to require these elements, they must amend
the RFQ and allow revised quotations.

      3. Injunctive Relief is Appropriate

       Having succeeded on the merits, plaintiff satisfies the first of the four factors
that must be considered when determining if permanent injunctive relief is
appropriate. See Centech Grp., 554 F.3d at 1037. Concerning the second factor, it is
well-established that the profits lost by an offeror because of the government’s
arbitrary evaluation of an offer constitute irreparable injury for purposes of
injunctive relief. See MORI Assocs., Inc. v. United States, 102 Fed. Cl. 503, 552
(2011). The alternative to a permanent injunction---recovery of bid preparation and

16The Court notes that Innovation equated the functionality of RFID readers with
[XXXX] scanners in its discussion responses. See supra note 13 (citing AR at 1434).

17 Indeed, there is no basis in the administrative record for concluding that the
“nesting” label for these stations refers to the placement of totes in a holder similar
to a nest, as opposed to other explanations, such as a metaphor for the place
prescriptions go before they are ready to enter the world. But even if it were the
former, this could merely reflect the incumbent’s use of a device it calls a tote nest
at these stations, AR at 1445, and be merely incidental as opposed to essential to
the function of reading the information on a tote.

                                         - 26 -
litigation costs---does not redress the loss of the opportunity to compete on a level
playing field for a valuable business contract. The Court finds that, absent
injunctive relief, plaintiff will suffer irreparable harm. See Hansen Decl. ¶¶ 3–4,
Ex. B to Pl.’s Br.

       The third injunctive relief factor is whether the harm to plaintiff if the
procurement decision is not enjoined outweighs the harm to the government and
third parties which would result from the injunction. Centech Grp., 554 F.3d at
1037. If the decision to remove ARxIUM from the competitive range and award the
delivery orders to Innovation is not enjoined, then plaintiff loses the opportunity to
compete for the profits from a $4.5 million contract. On the other side of the ledger
are potential costs to the government, and to active duty and retiree military
families, due primarily to the age of the refill systems that are being replaced. See
Def.’s Br. at 45–46; Def.’s Reply at 23–24. These systems were first purchased in
2002 and upgraded in 2006, and when down for repairs the Air Force must use a
commercial retail network at an additional cost to it of $45.69 per prescription, with
potential co-pays for the prescription purchasers. Mounts Decl. ¶¶ 3, 5, Ex. 1 to
Def.’s Br.

       In addition, [XXXXXXXXXXXX] are no longer received from the
manufacturer, and the Air Force has temporarily [XXXXXXXX] in the hope that the
system will soon be replaced. Id. ¶ 4. If the Air Force reverses course and requires
a custom support agreement [XXXXXXXX], the costs could be $191,666 each month,
retroactive to last July, and the manufacturer will discontinue this support in July
of this year. Id. There is also the prospect of additional labor and construction
costs due to delays in the installation of the new system, and $1 million in funding
could be lost to the Air Force if the installation is not completed by September 30,
2018. Id. ¶ 6. Finally, termination of the Innovation orders could also result in
reimbursement claims for labor and material. Id.

        Innovation, for its part, in addition to echoing the government’s concerns, see
Int.’s Reply at 19–20, argues that it would be harmed by a delay in its performance
of the contract, Int.’s Br. at 29. But since the award decision was arbitrary, for the
reasons explained above, intervenor cannot yet claim any entitlement to the
contract and the fruits of performance.18

     Although this is a close question, the balance of harms factor tips in
ARxIUM’s favor. While concerns over [XXXXXXXXXXXXXXXXXXXX] are no doubt

18 In this regard the matter at hand is far different from the authority Innovation
relies upon, ViON Corp. v. United States, 122 Fed. Cl. 559 (2015), in which the
protester lost its challenge on the merits, see id. at 579–80.


                                         - 27 -
serious, these risks have been tolerated by the Air Force for more than half a year,
and it is not clear why they could not be tolerated for a few months more as the
agencies correct their procurement mistakes. Any additional prescription costs due
to downtime were the current system to need repair, while potentially serious,
might never materialize. And no reliable basis for assessing any projected
construction delay costs has been provided. See Mounts Decl. ¶ 4.19

       Indeed, much of the prospective harm identified by the government is either
something that can be avoided, controlled, or mitigated by the government---such as
the choice to purchase a custom support agreement rather than [XXXXXXX]
[XXXXXXXXXXXX]---or is the result of the government’s own delays and
procurement errors, for which it cannot be credited, see Manus Medical LLC v.
United States, 115 Fed. Cl. 187, 195 (2014). And if the government is concerned
that appropriated funds might be lost if the installation is not completed by the end
of September, an injunction will not prevent it from accelerating the required time
period for installation. The Court notes that the initial acquisition plan anticipated
a delivery schedule of 120 days. AR at 576.

       The fourth factor considers whether “the public interest is served by a grant
of injunctive relief.” Centech Grp., 554 F.3d at 1037. As our court has frequently
recognized, “[a]n important public interest is served through conducting ‘honest,
open, and fair competition’ under the FAR, because such competition improves the
overall value delivered to the government in the long term.” Palantir USG, Inc. v.
United States, 129 Fed. Cl. 218, 294 (2016) (citing CW Government Travel, Inc. v.
United States, 110 Fed. Cl. 462, 496 (2013)); see also Arch Chems., 64 Fed. Cl. at 400
(discussing the purposes served by competition). Thus, “[t]he public interest is not
served when a government contract that is subject to competitive bidding is
arbitrarily awarded.” Univ. Research Co. v. United States, 65 Fed. Cl. 500, 515
(2005). Even in a more loosely-regulated FSS procurement, the integrity of the
competitive process demands that---after discussions have been held--- the
government not change its interpretation of a latently ambiguous requirement, or
change to an arbitrary and unsupported interpretation of another requirement,

19 Both Innovation and the government cite to construction delay costs relating to
Luke AFB that had been given as a reason to override the CICA stay. See Int.’s Br.
at 29 (citing AR at 1192); Tr. at 223 (citing AR at 1192–96). But those estimates far
exceed the incurred costs identified by the Air Force. Compare Mounts Decl. ¶ 4
(noting $20,000 in labor costs and $80,000 in construction delays as of October 25,
2017) with AR at 1194 (identifying delay costs of $10,000 per day). Moreover,
despite the alleged need to install the Luke AFB refill center equipment with
dispatch, under Innovation’s schedule of performance installation at that base was
to be the third of the four, beginning nearly eight weeks after the first base. Ex. 1
to Def.’s Status Report Re: Schedule of Performance, ECF No. 19-1.

                                        - 28 -
without providing offerors with proper notice and the opportunity to submit revised
quotations.

       To be sure, as Innovation has noted, see Int.’s Br. at 29, there is also a “public
interest in minimizing disruption” to the relevant agencies, Akal Security, Inc. v.
United States, 87 Fed. Cl. 311, 321 (2009) (citing Heritage of Am., LLC v. United
States, 77 Fed. Cl. 66, 80 (2007)). But as the progenitor of intervenor’s cited
authority explains, that interest may be served by injunctive relief which is
“tailored” to result in a “reduced level of disruption,” Heritage of Am., 77 Fed. Cl. at
80, which the Court believes will be the case here. Accordingly, plaintiff satisfies
this factor, as well.

       Under these circumstances, the Court finds it appropriate to enjoin DLA from
proceeding with the award made to Innovation under this RFQ. Because of the
latent ambiguity in requirement #23, which failed to inform vendors that first fill
images needed to be retrieved from a particular proprietary database or collected by
an alternative means, an award cannot be properly made until the RFQ is amended
to clearly state the Air Force’s requirement (including the identification of the
Symphony database), and offerors are given the opportunity to submit revised
quotations. And since “nesting station” was arbitrarily re-interpreted to involve a
device utilizing a basket-like container to hold totes while information from the
totes is read, if the agencies wish to require such a container functionality, the RFQ
must be amended to reflect this. In addition, if the agencies have changed course
and now would require RFID technology to be used with the totes, an amendment to
the RFQ is also necessary.20

       One of the problems with this procurement, however, was that the Air Force
and DLA did not properly consider the rights the government has to the first fill
images, and the responsibilities imposed on Innovation by any contracts under
which these images are collected and stored. Once these issues are properly
considered, the agencies might determine that their (and their contractors’) access
to these images is not impeded by storage in the Symphony database. Or they may
conclude that the retrieval of the images should not be the responsibility of the
awardee under the refill centers procurement. On the other hand, the agencies may
conclude, after proper consideration of their rights, Innovation’s responsibilities,
and the time-sensitive nature of the procurement, that they would be justified in
cancelling this procurement and making a sole source award. The Court does not
intend that its injunction be construed as preemptively precluding a cancellation
decision, as the appropriateness of such an action cannot be prejudged.


20The agencies are, of course, free to make other amendments to the RFQ, such as
shortening the time period for installation.

                                          - 29 -
       For the reasons discussed above, the Court is granting ARxIUM’s motion for
judgment on the administrative record and request for injunctive relief. But
because cancellation is being left open as a possibility, the Court will defer the entry
of judgment in this case. Mindful of the government’s desire to move quickly on this
matter, the Court will require that defendant file a status report within fourteen
days of the date of this opinion, informing the Court if the agencies have decided
either to amend the RFQ or to cancel the procurement. If the latter route is taken,
plaintiff may either move for an award of bid preparation and proposal costs, or file
a supplemental complaint to challenge the action, within fourteen days of the
cancellation decision.21 If the RFQ is amended, then judgment will be entered
within fourteen days of the status report, unless ARxIUM believes that the
amendments effectively preclude its ability to compete for the award---in which case
it may move for an award of bid preparation and proposal costs within those
fourteen days.

                                 III. CONCLUSION

       For the reasons discussed above, the Defense Logistics Agency acted
arbitrarily and capriciously in excluding ARxIUM from the competitive range and
making an award to Innovation Associates under RFQ1019219. Plaintiff’s motion
for judgment on the administrative record is GRANTED, and the cross-motions of
defendant and intervenor are DENIED. Plaintiff has proven its entitlement to a
permanent injunction rescinding the contract award to Innovation Associates.

       Accordingly, IT IS ORDERED that the United States, including the Defense
Logistics Agency, its Contracting Officer, and its other officers, agents, servants,
employees, and representatives, and all other persons acting in concert and
participating with them respecting the procurement under RFQ1019219, are
RESTRAINED AND ENJOINED from proceeding with the award to Innovation
Associates.

       Pending further order of the Court, IT IS ORDERED that the United
States, including the Defense Logistics Agency, its Contracting Officer, and its other
officers, agents, servants, employees, and representatives, and all other persons
acting in concert and participating with them respecting the procurement under
RFQ1019219 are hereby RESTRAINED AND ENJOINED from awarding a task
order under RFQ1019219 or allowing any contractor to perform under any task
order under RFQ1019219 until the solicitation is amended to clarify minimum
requirement #23 and the “nesting station” requirement.

21 Failure to file a supplemental complaint before judgment is entered in this case
will not eliminate any right plaintiff has to initiate a new protest, either at our
court or the GAO.

                                         - 30 -
       Judgment will not be entered at this time. Defendant shall file a status
report on or by Thursday, February 22, 2018, informing the Court whether the
RFQ has been amended or other action has been taken concerning this
procurement.

IT IS SO ORDERED.


                                     s/ Victor J. Wolski
                                     VICTOR J. WOLSKI
                                     Judge




                                      - 31 -
