Trace Systems Inc. v. United States

In the United States Court of Federal Claims
No. 22-404 C
(Filed: July 26, 2022)

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TRACE SYSTEMS INC., *
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Plaintiff, *
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v. *
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THE UNITED STATES, *
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Defendant, *
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and *
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GENERAL DYNAMICS *
INFORMATION TECHNOLOGY, INC., *
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Defendant-Intervenor. *
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MEMORANDUM OPINION AND ORDER

SOMERS, Judge.

Before the Court is the government’s Motion for Voluntary Remand. See ECF No. 67
(“Def.’s Mot. Voluntary Remand”). The government requests a remand to the Defense
Information Systems Agency (“DISA” or “agency”) to consider, inter alia, “the decisions at
issue in this protest,” including “the decision to cancel the CTSS IV procurement, and for any
administrative actions consistent with that reconsideration.” Id. at 1, 6. Although Defendant-
Intervenor, General Dynamics Information Technology (“GDIT”) does not oppose the motion,
id. at 1, Plaintiff opposes the motion because, in its view, the government has not articulated a
substantial and legitimate concern justifying remand. See ECF No. 71 at 10–21 (“Pl.’s Opp’n
Def.’s Mot. Voluntary Remand”). For the reasons explained below, the Court grants the
government’s motion to remand with instructions.

BACKGROUND

A chronicle of the prior (and relatively extensive for a bid protest) filings and
proceedings in this case is contained in the Court’s most recent memorandum opinion and order.
See Trace Systems Inc. v. United States, No. 22-404, 2022 WL 2761051 (Fed. Cl. July 14, 2022).
To summarize, Plaintiff filed a bid protest in this Court on April 7, 2022, challenging the
government’s decision to cancel a solicitation for a communications technical support services
(“CTSS”) contract and, as a result of that cancellation, the government’s decision to cancel an
indefinite delivery, indefinite quantity task order awarded to Plaintiff and to award a sole source
bridge contract to Defendant-Intervenor. See generally ECF No. 1. Since then, the government
has filed the administrative record twice, ECF Nos. 39–42, 55, along with a motion to correct the
administrative record that the Court granted, ECF Nos. 61–62, and Plaintiff has filed a motion to
compel and for leave to conduct discovery, ECF Nos. 45–46, along with two amended
complaints, ECF Nos. 26, 75. The Court held oral argument on Plaintiff’s motion to compel on
June 16, 2022. ECF No. 59. Following oral argument, on June 27, 2022, the Court ordered that

on or before July 8, 2022, the government (1) shall re-examine its materials related
to the decisions challenged in this protest to ensure that all materials that were
developed and considered by the agency in making the challenged decisions are
included in the administrative record; and (2) shall either FILE a complete
administrative record with the Court, along with a certification that the record is
now complete, or CERTIFY to the Court that the already-filed record is the
complete record consistent with this memorandum opinion and order and the cases
cited herein. The government SHALL ALSO review the administrative record for
completeness in light of the motion for leave to amend the complaint that was
granted today by separate order. See ECF No. 65.

Trace Systems Inc. v. United States, No. 22-404, 2022 WL 2761051, at *4 (Fed. Cl. July
14, 2022).

Three days later, the government filed the instant motion in response to that order,
requesting that the Court:

(1) grant this motion for a voluntary remand pursuant to RCFC 52.2; (2) remand
this matter to DISA for consideration of the decision to cancel the CTSS IV
procurement, and for any administrative actions consistent with that
reconsideration; (3) authorize, but not require, DISA to consider any further
information that the agency may gather during the remand in accordance with any
procedures that the agency may establish for that purpose; (4) establish the initial
duration of the remand for 32 days from the date of this filing (to and including
August 1, 2022), which may be extended upon request if necessary; (5) stay further
proceedings in this action pending the completion of the remand; and (6) order the
parties to file a joint status report within seven days following the conclusion of the
remand proceeding that sets forth the parties’ positions regarding whether further
litigation is necessary and, if so, proposed dates for defendant to file the
administrative record associated with the remand proceedings and for further
briefing.

Def.’s Mot. Voluntary Remand at 6–7. The government also observes that, despite the atypical
duration of this protest, without this remand the likely result of continuation of this protest “will
be to send the matter back to the agency to reconsider these same actions.” Id. at 5–6 (citing

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Trace Systems Inc., 2022 WL 2761051). The government in its reply brief further urges that
Plaintiff provides an important reason to remand in its second amended complaint: the
potentially improper role that Mr. Steven Dawson played in this procurement. ECF No. 73 at 5–
6 (“Def.’s Reply”) (“The second amended complaint also alleged that Mr. Dawson’s role in the
procurement was improper, an allegation that the contracting officer has not investigated, but
should be given the opportunity to do so. The remand will permit such an investigation.”).

Plaintiff opposes remand to DISA, arguing that the government fails to meet the test set
forth in SKF USA Inc. v. United States, 254 F.3d 1022 (Fed. Cir. 2001), because the government
fails to provide a “compelling justification for its request to remand this protest.” Pl.’s Opp’n
Def.’s Mot. Voluntary Remand at 11 (citing Owens & Minor Distrib., Inc. v. United States, 154
Fed. Cl. 349 (2021)). In support of its argument, Plaintiff asserts that, rather than having a
substantial and legitimate concern, the government, based on the Court’s July 14th memorandum
opinion and order, simply does not believe it will prevail in this protest with the current
administrative record and is seeking a “do-over.” Id. at 12. Plaintiff also contends that the
remand requested is “nearly identical to the Corrective Action taken by the Government months
ago in this protest.” Id. Additionally, Plaintiff argues that the need for finality vastly outweighs
any other justification to remand. Id. at 13–15. Finally, Plaintiff states that the government’s
motion for remand is overly broad and vague and, thus, is improper because the “[c]ase law
demonstrates unquestionably that the scope of remands should be limited.” Id. at 19.

DISCUSSION

A. Legal Standard

Rule 52.2 of the Rules of the United States Court of Federal Claims (“RCFC”) allows the
Court to order remand “of appropriate matters to an administrative or executive body or official.”
RCFC 52.2(a). The Court may order remand of an appropriate matter pursuant to a motion or
sua sponte. Id. Remand is generally advised when the agency’s concern is “substantial and
legitimate.” SKF USA Inc. 254 F.3d at 1029. An agency might request a remand without
admitting error because it has “doubts about the correctness of its decision or that decision’s
relationship to the agency’s other policies.” Id. In such a case, the Court has discretion in
deciding if remand is appropriate. Id. The Court should deny remand if it is frivolous or
requested in bad faith. See Miss. River Transmission Corp. v. Fed. Energy Regul. Comm’n, 969
F.2d 1215, 1217 n.2 (D.C. Cir. 1982). However, the true inquiry in deciding a motion to remand
is if “the agency intends to take further action with respect to the original agency decision on
review.” Limnia, Inc. v. United States Dep’t of Energy, 857 F.3d 379, 386 (D.C. Cir. 2017). An
agency need not “confess error or impropriety in order to obtain a voluntary remand. But the
agency ordinarily does at least need to profess intention to reconsider, re-review, or modify the
original agency decision that is the subject of the legal challenge.” Id. at 387; see also Keltner v.
United States, 148 Fed. Cl. 552, 563 (2020) (“The case law thus makes clear that where an
agency requests a remand without confessing error, the agency must express some intent to
reconsider the original agency decision that is the subject of the legal challenge, after which the
court has discretion to grant or deny the motion.”). Thus, despite the tendency among courts to
grant motions for remand, remand is not appropriate in all circumstances and the Court should
only grant such a motion after serious consideration. See Rahman v. United States, 149 Fed. Cl.

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685, 690 (2020) (stating that motions for voluntary remand “should be treated as with any other
motion affecting the substantial rights of the plaintiff, by subjecting the government’s position to
careful analysis to ensure that the motion is properly supported and justified” and that the judge
considering them should engage with the record). Finally, the opposing party’s consent is not
necessary to remand a case. See id. (granting a contested motion to remand).

B. The Government Articulates a Substantial and Legitimate Concern Justifying
Remand

In SKF USA Inc. v. United States, the Federal Circuit reasoned that, in cases in which an
agency seeks a remand “to reconsider its previous position” without admitting error, “if the
agency’s concern is substantial and legitimate, a remand is usually appropriate.” 254 F.3d at
1029. Such reconsideration of an agency position could include instances in which the agency
wishes “to consider further the governing statute, or the procedures that were followed,” or the
agency “might simply state that it had doubts about the correctness of its decision or that
decision’s relationship to the agency’s other policies.” Id. Recently, multiple judges on this
Court, including the undersigned, have utilized the test for substantial and legitimate concern
articulated in Ad Hoc Shrimp Trade Action Committee v. United States, 882 F. Supp. 2d 1377
(Ct. Int’l Trade 2013). See, e.g., Lyon v. United States, No. 20-755, 2022 WL 2294191 (Fed. Cl.
June 22, 2022); Owens & Minor Distrib., Inc., 154 Fed. Cl. 349. The test deduced from that
opinion is that “[a]n agency’s concerns are substantial and legitimate where (1) the agency
provides a compelling justification for its remand request; (2) the need for finality does not
outweigh the justification for voluntary remand presented by the agency; and (3) the scope of the
agency’s remand request is appropriate.” See Keltner, 148 Fed. Cl. at 564 (citing Ad Hoc Shrimp
Trade Action Comm., 882 F. Supp. 2d at 1381) (internal quotations omitted).

Regarding the compelling justification for remand, the government asserts that “the
agency wishes to reconsider its decision to cancel the CTSS IV procurement” and that “[i]t
intends in particular to reconsider the best path forward for the CTSS IV procurement, and
whether the CTSS IV solicitation serves the current needs and requirements of the Air Force.”
Def.’s Mot. Voluntary Remand at 4. As an initial matter, “a voluntary remand request made in
response to a party’s APA challenge may be granted only when the agency intends to take
further action with respect to the original agency decision on review.” Limnia, 857 F.3d at 386.
That is exactly what the agency states it will do here. The agency also expressed that it will
reconsider its handling of the CTSS IV procurement from solicitation to award of the sole source
contract to Defendant-Intervenor, see Def.’s Mot. Voluntary Remand at 4–5, which is entirely
proper to do in this case, see also Limnia, 857 F.3d at 387; Keltner, 148 Fed. Cl. at 563 (“The
case law thus makes clear that where an agency requests a remand without confessing error, the
agency must express some intent to reconsider the original agency decision that is the subject of
the legal challenge, after which the court has discretion to grant or deny the motion.”). It appears
that the agency genuinely desires to reconsider its position or correct any errors made, and it is
undoubtedly in the best position to do so. See Hirsch v. United States, No. 19-236C, 2019 WL
4316880, at *2 (Fed. Cl. Sept. 12, 2019) (“A remand allows an agency the chance to correct its
own errors.” (citing Ethyl Corp. v. Browner, 989 F.2d 522, 524 (D.C. Cir. 1993))); Philippeaux
v. United States, No. 21-1466, 2021 WL 4059100, at *4 (Fed. Cir. Sept. 7, 2021) (finding it was
not an abuse of discretion to remand to the relevant agency when the agency was “in the best

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position to review new evidence” and correct any errors). Moreover, the Court does not see any
conduct that would indicate bad faith or frivolity on the government’s part, and Plaintiff has not
clearly alluded to any. See SKF USA, 254 F.3d at 1029 (“A remand may be refused if the
agency’s request is frivolous or in bad faith.”).

Furthermore, the case at bar is distinct from the factual situation presented in Keltner v.
United States because there the government requested remand for the agency to “expound upon
its rationale for denying plaintiff’s request.” 148 Fed. Cl. at 563 (emphasis added) (internal
quotations omitted). Judge Solomson, in denying the motion to remand in Keltner, noted that
“[t]he government has not pointed to any case—and this Court has found none—in which a court
has granted a motion for voluntary remand when the government’s primary goal on remand is to
write a better decision for a predetermined outcome.” Id. at 565 (citation omitted). While
Plaintiff may perceive this remand as a chance for the government simply to paper over its
mistakes, the Court takes the government at its word that the agency will truly reconsider, as it is
required to, its decisions. If for any reason that should not occur, Plaintiff may seek judicial
intervention. But the Court sees this remand as an opportunity for the agency to reevaluate this
procurement more fulsomely and after intervening events, namely, Plaintiff’s discovery of
former GDIT employee Steve Dawson’s involvement in this procurement. See 2d Amend.
Compl. ¶¶ 75–83. The Court agrees with the government that the potential impact of Plaintiff’s
allegations of impropriety in this procurement by Mr. Dawson could prove material, and his role
could alter the agency’s decision-making upon reconsideration. See Def.’s Mot. Voluntary
Remand at 4. Therefore, the Court finds there is a compelling justification for the government’s
remand request.

The Court disagrees with Plaintiff that, despite the atypical duration of this protest, the
need for finality does not outweigh the proffered justification. Plaintiff asserts that, after weeks
of delays, the protest should proceed to cross-motions for judgment on the current administrative
record and that the government should have to defend the agency’s decisions on this record. See
Pl.’s Opp’n Def.’s Mot. Voluntary Remand at 22. However, in addition to the reasons for the
remand outlined above, the Court does not see the utility in Plaintiff’s suggested approach at this
point. In considering whether to grant remand or proceed to the merits, as Plaintiff suggests, the
Court must also consider the efficacy of a remand versus the ultimate result of a potential ruling
in favor of Plaintiff on the merits based on the current administrative record. See Rahman, 149
Fed. Cl. at 690 (“[E]ven if the Court were to agree with the plaintiff and find him entitled to
relief, the determination of the parameters of that relief would require a remand to the [agency]
to consider these arguments in the first instance. In such a case, a remand at this stage might
produce a quicker ultimate decision on the merits, making a remand now a more efficient means
of resolving the plaintiff’s claim promptly.”). In other words, the Court agrees with the
government’s assertion that, even if this case was to proceed at this juncture to cross-motions for
judgment on the administrative record, the injunctive relief granted (assuming the Court found
for Plaintiff) would be nearly identical: a remand to the agency with the instruction that it could
not rescind the procurement and potentially the contract award on this administrative record (or
for the reasons stated in this administrative record) and/or that the agency could not award the
sole source contract to GDIT on this administrative record (or for the reasons stated in this
administrative record). Thereafter, the agency would in effect have to “reconsider its decision to
cancel the CTSS IV procurement,” “reconsider the best path forward for the CTSS IV

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procurement, and whether the CTSS IV solicitation serves the current needs and requirements of
the Air Force,” and “reconsider[] . . . the sole source bridge contract.” Def.’s Mot. Voluntary
Remand at 4, 5. But those are all things the agency is committing to do during the requested
remand.

Although judgment on the administrative record in favor of Plaintiff would likely come
with some form of injunctive relief, at the end of the day, other than the issuance of an
injunction, all that would be added by taking that extra step now would be that the agency would
have the Court’s instructions on why, for instance, the reasons given in its initial cancellation
decision were unreasonable or unsupported by the administrative record. However, the agency
would still be entitled to determine in a manner consistent with the Court’s decision that, for
example, it would be in its best interest to cancel the contract for the convenience of the
government, see 48 C.F.R. § 49.101, or that the needs of the government have changed so much
that an amendment would be required that is of such a character that cancelation is required, see
48 C.F.R. § 15.206(e). Plaintiff could then protest those decisions, just as it can continue the
instant protest if it so chooses after the remand concludes. Simply put, if the result in this case is
going to be similar regardless of whether the Court takes the intermediate step of granting
judgment on the administrative record, the Court sees no need to deny the agency the opportunity
to reconsider its initial decisions with the attendant possibility that the reconsideration resolves
this protest saving not only the parties’ resources but the Court’s as well. See Parcel 49C Ltd. v.
United States, 31 F.3d 1147, 1154 (Fed. Cir. 1994) (noting that in affirming the trial court’s
injunction that “[t]he Government retains the power to proceed with its award process or to
terminate the award process for any legal reason.”); Gear Wizzard, Inc. v. United States, 99 Fed.
Cl. 266, 277 (2011) (holding while the government cannot “cancel its way out of . . . illegal
actions” that the agency still had discretion to lawfully terminate a request for quote); Hirsch,
2019 WL 4316880, at *2 (granting a motion to remand when return to the agency would be
required to determine what relief the plaintiff was entitled to); RCFC 1 (noting that the rules of
this Court “should be construed, administered, and employed by the Court and the parties to
secure the just, speedy, and inexpensive determination of every action and proceeding”).

For the reasons stated above, the Court finds that the government has articulated a
substantial and legitimate concern sufficient to justify remand. Moreover, independent of the
rationale articulated in SKF USA, the Court cannot ignore the fact that denying a motion to
remand is rare, see Keltner, 148 Fed. Cl. at 559 (noting that at that time there may be as few as
two motions to remand that courts have denied), and that the Court has both extensive discretion
in deciding whether to remand a case, see SKF USA, 254 F.3d at 1029, as well as the inherent
power to do so sua sponte, see RCFC 52.2. In addition, given the Court’s previous observations
regarding the administrative record, see Trace Systems Inc., 2022 WL 2761051, this result is also
consistent with Supreme Court guidance on this issue:

[i]f the record before the agency does not support the agency action, if the agency
has not considered all relevant factors, or if the reviewing court simply cannot
evaluate the challenged agency action on the basis of the record before it, the proper
course, except in rare circumstances, is to remand to the agency for additional
investigation or explanation.

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Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985). Thus, a remand will give the
agency a chance to go back and reconsider its previous decisions and, in so doing, keep a record
of “all the material that was developed and considered by the agency in making its decision.”
Cubic Applications, Inc. v. United States, 37 Fed. Cl. 339, 342 (1997) (citation omitted)
(emphasis added); see also Thompson v. Dep’t of Labor, 885 F.2d 551, 555 (9th Cir. 1989) (“The
whole administrative record . . . consists of all documents and materials directly or indirectly
considered by agency decision-makers,” including “evidence contrary to the agency’s position.”)
(emphasis omitted).

CONCLUSION

For the reasons stated above, the Court orders the following:

1. The government’s motion for remand is GRANTED.

2. On remand, DISA is DIRECTED to reconsider its decision to cancel the CTSS IV
procurement, including any administrative actions related to that cancellation. In
particular, DISA is directed to:

a. Reconsider its decision to cancel the CTSS IV procurement;

b. Reconsider its decision to cancel the award of the CTSS IV contract to Plaintiff,
to the extent that DISA decides not to cancel the CTSS IV procurement as a result
of the reconsideration ordered herein; 1 and

c. Reconsider its decision to award a sole source bridge contract to Defendant-
Intervenor, including an examination of the allegations presented in the Second
Amended Complaint regarding bias or ethical violations related to the award of
the bridge contract.

1
The government asserts in its remand request that the decision to cancel the award to Plaintiff
does not fall within this Court’s bid protest jurisdiction because the claim must properly be brought under
the Contract Disputes Act. See Def.’s Reply at 4–5. However, the agency’s decision to cancel the
procurement and award of the contract appears to bind together the two cancellations, see ECF No. 19-1
at 3 (“The Government’s initial award to Trace was tainted by the flaws present in the RFP”), as does the
government’s brief in response to the motion to compel, see ECF No. 54 at 14 (noting that “the decision
to cancel the solicitation, from which the termination for convenience flows”). What is more, Plaintiff
appears to make a nonfrivolous allegation that its claim related to the cancellation of the award does fall
within the Court’s bid protest jurisdiction, and the government—despite more than 60 days having
elapsed since the complaint was filed and without any motions for judgment on the administrative record
being filed—has neither filed an answer nor moved to dismiss any portion of the complaint. Accordingly,
because there appears to be a nonfrivolous allegation that the claim falls within the Court’s jurisdiction,
the government requested this remand prior to filing a dispositive motion, and the government has not
argued in either an answer or a motion to dismiss that jurisdiction is lacking, the agency shall additionally
reconsider its cancellation of the CTSS IV award to Plaintiff if the agency decides not to cancel the
procurement on remand.
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 3. The remand is for a period of thirty-eight days, up to and including September 2, 2022.
Although this remand period may be extended upon request, the Court does not anticipate
significantly extending the remand period and will not extend the remand period except
upon receipt of a motion that explains in detail where the agency stands in the remand
process and the reasons an extension is needed.

4. This protest is hereby STAYED in the interim.

5. The government shall file a notice with the Court within three business days of the
agency’s decision(s) on remand.

6. The Clerk of the Court is directed to serve a certified copy of this remand order on:

Defense Information Systems Agency
Defense Information Technology Contracting Organization
Scott Field Office (PL8)
2300 East Drive
Scott AFB, IL 62225-5406

7. Counsel for the government is also DIRECTED to ensure that DISA immediately
receives a copy of this order to avoid any delays in DISA’s consideration of this matter
on remand.

IT IS SO ORDERED.

s/ Zachary N. Somers
ZACHARY N. SOMERS
Judge

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