AgustaWestland North America, Inc. v. United States
880 F.3d 1326 (2018)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An internal agency directive that reallocates existing assets and designates a specific equipment type for a role is not a 'procurement decision' subject to judicial review. A subsequent sole-source justification for a follow-on contract is not arbitrary and capricious if the agency provides a rational basis, such as substantial duplication of costs or unacceptable delays that would result from using a different supplier.
Facts:
- In 2006, after a full and open competition, the U.S. Army awarded Airbus a contract to supply UH-72A Lakota helicopters.
- The 2006 contract included options for the Army to purchase additional helicopters up to a total of 483, with the final option date being September 30, 2015.
- In 2013, the Army initiated the Aviation Restructure Initiative to reduce costs, which included retiring its old TH-67 training helicopters.
- On April 3, 2014, the Army issued Execution Order 109-14, which formally designated the existing UH-72A Lakota as the Army's new 'Institutional Training Helicopter,' with implementation focused on redistributing existing assets.
- The restructuring created a total need for 427 UH-72A helicopters.
- After exercising all available options under the 2006 contract, the Army was still sixteen helicopters short of its requirement.
- Airbus has exclusive ownership of all data rights required to produce, maintain, and modify the UH-72A helicopter.
- On December 10, 2015, the Army issued a Justification and Approval (J&A) to acquire the final sixteen UH-72A helicopters from Airbus on a sole-source basis.
Procedural Posture:
- AgustaWestland filed a complaint in the United States Court of Federal Claims, alleging the Army's Execution Order was an unlawful procurement decision.
- The Court of Federal Claims stayed proceedings until the Army made a final procurement decision.
- After the Army issued its Justification and Approval (J&A) for a sole-source award to Airbus, AgustaWestland filed a supplemental complaint and a motion for a preliminary injunction.
- The Court of Federal Claims found the Execution Order was a procurement decision violating competition rules and that the J&A was arbitrary and capricious.
- The Court of Federal Claims granted the preliminary injunction, stopping the Army from awarding the contract to Airbus.
- The United States (appellant) appealed the injunction to the U.S. Court of Appeals for the Federal Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is an internal Army order that designates a specific type of existing helicopter for a new role a 'procurement decision' subject to challenge, and is a subsequent sole-source contract to acquire more of that same helicopter arbitrary and capricious when justified by significant costs and delays associated with introducing a different model?
Opinions:
Majority - Hughes, Circuit Judge
No. An internal Army order reallocating existing assets is not a reviewable 'procurement decision,' and a subsequent sole-source contract to meet the needs created by that reallocation is not arbitrary and capricious when rationally justified. The Army's Execution Order was not a procurement decision subject to Tucker Act jurisdiction because it focused on redistributing existing assets and did not initiate a process to acquire new property. Furthermore, the Army’s Justification and Approval (J&A) for the sole-source contract was not arbitrary and capricious because it was a permissible 'follow-on contract' for a major system and was rationally based on two valid exceptions under the Federal Acquisition Regulation (FAR). The Army coherently explained that procuring from any other source would result in substantial duplication of costs and unacceptable delays of over three years, which would introduce risks to national security. The lower court also abused its discretion by supplementing the administrative record, as the original record was sufficient for judicial review.
Analysis:
This decision clarifies the jurisdictional boundary between an agency's internal, non-reviewable planning decisions and its external, reviewable 'procurement decisions.' It establishes that a directive focused on reallocating existing assets does not trigger a competitor's right to protest, even if that directive later creates a procurement need. The ruling also reinforces the significant deference courts afford to agency justifications for sole-source awards, provided the agency articulates a rational basis tied to statutory exceptions like cost duplication or unacceptable delay. Finally, it strengthens the principle that judicial review of agency action is typically confined to the administrative record that was before the agency at the time of its decision.
Unlock the full brief for AgustaWestland North America, Inc. v. United States