from the United States Court of Federal Claims in No.
1:14-cv-00877-SGB, Chief Judge Susan G. Braden.
J. Callahan, Rogers, Joseph, O'Donnell, San Francisco,
CA, argued for plaintiff-appellee. Also represented by Neil
H. O'Donnell; Jeffery M. Chiow, Lucas Taylor Hanback,
Anthony F. Schiavetti, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washington,
DC, argued for defendant-appellant. Also represented by
Franklin E. White, Jr., Robert E. Kirschman, Jr., Benjamin C.
Prost, Chief Judge, Chen and Hughes, Circuit Judges.
Hughes, Circuit Judge.
United States appeals from a decision of the Court of Federal
Claims enjoining the United States Army from proceeding with,
or awarding, a contract to Airbus Helicopter, Inc. The Court
of Federal Claims found that Army Execution Order 109-14,
which implemented the Army's Aviation Restructure
Initiative designating the UH-72A Lakota helicopter as the
Army's "Institutional Training Helicopter, "
was a procurement decision in violation of the Competition in
Contracting Act and relevant provisions of the Federal
Acquisition Regulation. After supplementing the
administrative record, the Court of Federal Claims found that
the Army's decision to purchase sixteen UH-72A Lakota
helicopters from Airbus also violated the Competition in
Contracting Act and the Federal Acquisition Regulation
because the Sole Source Justification and Approval was
arbitrary and capricious. We conclude that Execution Order
109-14 was not a procurement decision subject to review, that
the Sole Source Justification and Approval was not arbitrary
and capricious, and that it was an abuse of discretion to
supplement the administrative record. Accordingly, we reverse
the trial court's decision and vacate the preliminary
22, 2005, the Army issued an Acquisition Strategy to procure
322 Light Utility Helicopters (LUH) by full and open
competition. Both AgustaWestland and Airbus submitted bids.
On June 30, 2006, Airbus was awarded Contract No.
W58RGZ-06-C-0194 (2006 Con- tract) for $43, 090,
AgustaWestland filed an unsuccessful bid protest of the award
decision with the Government Accountability Office.
2006 Contract required that Airbus provide a base quantity of
eight low rate initial production UH-72A Lakota helicopters.
The 2006 Contract also provided that, during each Program
Year 2 through 10, the Army could exercise options to
purchase up to a total of 483 UH-72A Lakota helicopters. The
last date that the Army could exercise an option was on
September 30, 2015. The 2006 Contract expired on June 30,
January 2012, the President of the United States and the
Secretary of Defense announced new Strategic Guidance that
reduced the Defense Budget and called for the
"resizing/reshaping" of the Armed Forces. J.A.
5196- 97. To implement the Strategic Guidance, in August
2013, the Chief of Staff of the Army issued the Aviation
Restructure Initiative ("restructuring initiative"
or "initiative"), which was "designed to
deliver the best Army Aviation force possible within resource
constraints." J.A. 5197. The restructuring initiative,
therefore, "di-vest[ed] legacy systems, [and] invest[ed]
in modernization of Aviation best systems" by
"redistributing assets" and "reducing aircraft
types and standardizing Aviation brigade designs."
Id. The initiative officially retired the TH-67, a
single-engine aircraft used for training at Fort Rucker,
Alabama, and designated the UH-72A Lakota- the helicopter
procured by the Army in the 2006 Contract with Airbus-the
"Institutional Training Helicopter." J.A. 5198. The
initiative was formally implemented by the issuance of Army
Execution Order 109-14 on April 3, 2014. J.A. 5196-98.
comply with the objectives of the restructuring initiative,
the Army determined that it needed to increase the UH-72A
Lakota helicopter program by 110 helicopters, from 317 to 427
helicopters. J.A. 2775. Initially, the Army considered a sole
source acquisition for 155 UH-72A Lakota helicopters, and
published a sources sought notice on September 4, 2014, to
explore this option. J.A. 2803.
September 19, 2014, AgustaWestland filed a Complaint for
Declaratory and Injunctive Relief in the United States Court
of Federal Claims, arguing that the Execution Order was a
procurement decision. Because no final decision "with
respect to the competitive process to be used" had been
made, the Court of Federal Claims stayed proceedings. J.A. 7.
the Army decided not to pursue the procurement of 155 UH-72A
Lakota helicopters. It chose to exercise the remaining
options on the 2006 Contract with Airbus permitting the
procurement of 412 UH-72A Lako-ta helicopters, but leaving
the Army sixteen helicopters short of its total
requirement. J.A. 2956. Because Airbus "has
exclusive ownership of all data rights required to produce,
maintain, and modify the UH-72, " the Army was faced
with procuring sixteen alternate aircraft, or procuring
sixteen helicopters from Airbus through a sole source
follow-on contract. J.A. 2957. On December 10, 2015, the Army
issued a Justification and Approval (J&A) to acquire the
UH-72A Lakota helicopters from Airbus "on an other than
full and open competition basis." J.A. 2965. The Army
justified this decision based on the costs and delay
associated with "procuring and sustaining an alternate
aircraft" separate from the UH-72A Lakota. J.A. 2958.
AgustaWestland filed a Supplemental Complaint, a Motion for
Preliminary Injunction, and a Motion for Judgment on the
Administrative Record. The Government opposed
AgustaWestland's motions and filed a Cross-Motion for
Judgment on the Administrative Record. Relevant to this
appeal, the Court of Federal Claims found that the April 3,
2014 Execution Order was a procurement decision in violation
of the Competition in Contracting Act (CICA) and the relevant
Federal Acquisition Regulation (FAR) provisions. The Court of
Federal Claims then determined that it could not
"conduct 'effective judicial review' without
supplementing the Administrative Record, " J.A. 25 n.33,
and therefore considered evidence not contained in the
administrative record. After supplementing the administrative
record, the Court of Federal Claims found that the Army's
J&A and deci- sion to purchase sixteen UH-72A Lakota
helicopters without ...