and advised the Secretary that it wanted to serve as the system contractor again in the future.
The second change involves subsequent variants of the system. In 1993 the Navy established a new variant, (v)10, to replace the (v)6 variant upon which the down select competition was based. Additionally, beginning in 1996, the Navy will be using yet another variant, the (v)x, which will require the producer to rewrite the associated display software.
Additionally, the Secretary calculated that the cost of switching from a sole-source process to a competitive bid process was an estimated eight million dollars ($ 8,000,000.00). However, the Secretary also estimated that the likely savings to the Navy from awarding the contract on a competitive basis could be as much as forty-eight million dollars ($ 48,000,000.00). Therefore, the Secretary concluded that it could expect to recover the costs through competition.
The Secretary also analyzed the available information and concluded that as long as the contract was awarded on time, submitting this contract to competitive bids would not result in unacceptable delays. The Secretary similarly concluded that competition would not impact ship schedules or system performance.
The undisputed record also establishes that the Secretary afforded Westinghouse an opportunity to present its views on the matter to the Secretary prior to the Secretary making his procurement decision. Specifically, Westinghouse sent numerous letters to the Secretary outlining its position on the issue. Westinghouse officials also met with Navy officials on numerous occasions to discuss the issues. The Secretary considered, yet rejected, Westinghouse's reasons for why the Secretary should not submit this contract to competitive bids. Additionally, the Secretary responded to correspondence from various Congressmen who wrote to the Secretary on Westinghouse's behalf. Finally, the Secretary explained its reasons for submitting this contract to competitive bids before the Senate Armed Services Committee at a hearing conducted for that purpose on April 5, 1995.
The court will not provide a plenary review of the Secretary's decision, nor will we, as Westinghouse urges, recalculate the Secretary's mathematical estimates or analyze whether the Secretary's conclusions are impeachable. It is not the court's function to determine whether the Secretary's decision was a wise one or even a fair one. The court's review is to determine whether the Secretary's analyses and decisions were arbitrary, capricious, abuse of discretion, or otherwise not in accordance with the law. The court concludes that, taken as a whole, they were not.
C. Equitable Estoppel
Finally, we address Westinghouse's argument that the government is equitably estopped from awarding this contract to any entity other than Westinghouse as a sole-source producer. We conclude that the doctrine of equitable estoppel is not applicable here.
In order to prevail on a traditional equitable estoppel theory, a party must prove that the respondent misrepresented a material fact and that the party reasonably relied on that misrepresentation to his detriment. Monongahela Valley Hosp. Inc. v. Sullivan, 945 F.2d 576, 589 (3d Cir. 1991). The Supreme Court has made clear, however, that the government may not be estopped on the same terms as other litigants. Office of Personnel Management v. Richmond, 496 U.S. 414, 419, 110 L. Ed. 2d 387, 110 S. Ct. 2465 (1990). Indeed, although the Supreme Court has not adopted a categorical rule that equitable estoppel may not be used against the government in any circumstances, it has come close. The Court itself has expressly noted that it has reversed every case it has reviewed in which a lower court has applied equitable estoppel against the government. Id. at 422.
Nevertheless, to the extent that equitable estoppel is viable against the government, when estoppel is asserted, the party must prove, in addition to a material misrepresentation, affirmative misconduct by the government. SIU de Puerto Rico v. Virgin Islands Port Auth., 42 F.3d 801, 803-04 (3d Cir. 1994). We find no evidence in the record of this case that supports a finding of affirmative misconduct by the government.
We have carefully considered plaintiff's arguments in this regard and, although artfully stated, plaintiff simply attempts to piggyback a claim of affirmative misconduct onto its claim of misrepresentation. This argument falls short of the mark. The Court of Appeals for the Third Circuit has stated clearly and repeatedly that the affirmative misconduct must be distinct from the alleged misrepresentation that might warrant the use of equitable estoppel against a non-government litigant. Id.; Monongahela, 945 F.2d at 589. Accordingly, a party cannot simply reassert the same facts and circumstances that constituted the misrepresentation element and relabel it as affirmative misconduct. We assume that the court of appeals understood the impact of the words it used and their practical effect.
In summary, Westinghouse has failed to place on the record evidence that the Secretary has engaged in any affirmative misconduct in regard to this matter; therefore, equitable estoppel cannot be used against the Secretary in this case.
Finally, there is an additional reason why equitable estoppel is inappropriate in this case, a reason equally as important as those discussed previously. As its name implies, the doctrine of equitable estoppel has inherent within it equitable considerations and, as in any doctrine invoking the court's equity, the court must balance the legitimate competing interests of the parties involved. The court has done so and finds that even to the extent that the elements of a properly invoked equitable estoppel theory are arguably present in this case, the competing interests involved weigh in favor of the Secretary for several reasons.
First, the Secretary's interest in having this contract submitted to two bidders is substantial. Foremost, it complies with Congress's intent that the Competition In Contracting Act ensures full and open competition for defense procurement contracts. The benefits of competition for procurement contracts are obvious: it will allow more business entities, such as Lockheed, to participate in government procurement programs; and it will advance the public's interest in ensuring that defense contracts are awarded at the lowest cost to the public funds. Indeed, it fosters not only a lower cost to the public funds, but also the best contract. Additionally, the ongoing expectation for competition for procurement contracts provides an incentive to American business to invest their capital and resources in more effective, innovative, and cost efficient products.
On the other hand, Westinghouse's interest in restricting the competition to itself by receiving a sole-source award is the antithesis of the Congress's intent in passing the Act and would serve no interest other than its own financial gain. In either event, Westinghouse is not precluded from competing for the contract. And, if, as it contends, an award to another contractor would result in unnecessarily high costs to the government, Westinghouse presumably would be the low offerer and, thus, win the award.
We find that the government's interests in going forward with competition in this case outweighs any equitable rights Westinghouse could assert by pleading estoppel.
For the foregoing reasons, the court grants defendant's and intervenor's motions for summary judgment and denies plaintiff's motion for summary judgment. The appropriate order follows.
AND NOW, this 30th day of June, 1995, upon consideration of all motions for summary judgment, briefs in support and opposition and oral testimony, IT IS HEREBY ORDERED that defendant's motion for summary judgment [document #32] and intervenor's motion for summary judgment [document #30] are GRANTED. Plaintiff's motion for summary judgment [document #34] is DENIED. The Clerk is directed to mark this case closed.
BY THE COURT:
Gary L. Lancaster, J.
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