Citations
- 351 F. Supp. 2d 1261
Full opinion text
MEMORANDUM OPINION
OTT, United States Magistrate Judge.
This case is before the court on the plaintiffs’ “Motion for Additional Relief’ (doc. 89) and the defendants’ “Motion to Strike Extra-Record Evidence, Opposition to Plaintiffs’ Motion for Additional Relief, and Motion for Summary Judgment” (doc. 91). In their motion, the plaintiffs request that the court grant relief additional to that provided in its September 27, 2002, Memorandum Opinion (doc. 84). The defendants oppose the motion and ask that the court strike the “extra-record” evidence that is offered in support of the plaintiffs’ motion.
1. PROCEDURAL BACKGROUND
A. Administrative History
Plaintiff DESE Research, Inc. (“DESE”), is a research and engineering consulting firm specializing in the areas of defense, energy, space, and the environment. Wallace E. Kirkpatrick is the CEO and President of DESE, Stephen Kirkpatrick is the Senior Vice President of DESE. On July 14, 1997, the United States Army Space and Missile Defense Command awarded the plaintiffs a cost contract (DASG 60-97-C-0054). The contract was for the development of software for the Image Enhancement System follow-on effort in support of the Kinetic Energy Anti-Satellite (KE ASAT) Weapons System Program. Steve Tiwari (“Tiwari”) was the Army’s Program manager for the contract. DESE requested and received approval to issue a cost-plus-fixed-fee subcontract to Titan Corporation (“Titan”). James T. Hackett (“Hackett”) was assigned to work by Titan on the contract with DESE.
In September 1999, the Defense Contract Audit Agency audited the plaintiffs’ contract and found that DESE had claimed costs that appeared to be for “lobbying” efforts and for other activities outside the scope of the contract. The information was provided to the U.S. Army Criminal Investigation Command (“CID”).
CID immediately began an investigation into the allegations of “lobbying” and that the costs for the same were improperly charged to the contract. CID obtained various documents during its investigation, including the “Titan Activity Report” and “Trip Report” which were prepared by Hackett and submitted to DESE in support of billings that were ultimately submitted to the Army. The purportedly improper conduct and billings were identified by the Army from the plaintiffs’ documentation. Specifically, the improper conduct purportedly was evidenced in the documentation that Titan submitted in support of its original billings to DESE, which were the basis of DESE’s submission of billings to the government.
CID coordinated its investigation with the Army’s Procurement Fraud Division (“PFD”), which is responsible for coordinating and monitoring criminal, civil, contractual, and administrative remedies in significant cases alleging fraud and corruption in Army contracts. See 32 C.F.R. § 516.60.
On May 29, 2001,- PFD issued show cause letters to DESE and Wallace Kirkpatrick concerning possible violations of 18 U.S.C. § 1914 and FAR § 31.205.22(a). A letter was also sent to Tiwari. The letters requested that the plaintiffs respond to the allegations before PFD made any recommendation to the suspension authority. Through various contacts, counsel for the plaintiffs received a second, more specific show cause letter stating that DESE and Kirkpatrick engaged in lobbying activities with appropriated funds in violation of FAR § 31.205.22(a) and 18 U.S.C. § 1913 and that DESE and Wallace Kirkpatrick presented false claims to the Army in violation of 18 U.S.C. § 287. Included in the second letter was a 35-page attachment, consisting of 83 specific questions to be addressed by the plaintiffs.
The plaintiffs submitted their response in September 2001. Sheryl Butler, an “Attorney-Advisor” with PFD, reviewed the response. She found the response to be “non-responsive in many respects to the 83 specific questions, but it did set forth Mr. Tiwari’s and DESE’s general arguments against the allegations of wrongdoing.” (Butler Memo, at p. 3). She also stated:
.... By Mr. Tiwari’s and DESE’s own admission, at least ten meetings with members of Congress, or their staff, were characterized as social lunches/dinners or personal meetings; and at least seven of Mr. Hackett’s interviews with the press were characterized as a normal exchange of information between journalists, as well as occasions at which Mr. Hackett expressed his own opinions and did not act as a spokesperson for the Army or KE ASAT.
(Id.) (italics in original). The parties diligently attempted to settle their disagreements, and, at one point, perceived that they had reached a “framework for settlement of this case.” (Id. at p. 4). After settlement was not possible, Butler submitted a memorandum to General Daniel V. Wright (“General Wright”) as the Suspension and Debarment Official, recommending suspension of Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE. She concluded as follows:
a.A prima facie case exists that Mr. Tiwari, DESE, W. Kirkpatrick, and Mr. Hackett under a DESE subcontract, performed lobbying services under contract # DASG 60-97-C-0054 and that DESE and W. Kirkpatrick submitted claims for these unallowable costs to the government in violation of 18 U.S.C. § 287 and FAR section 31.205-22(a). Counsel for DESE has admitted that these are the activities for which Titan billed DESE and which were in turn billed to the government. In addition, other activities were performed and billed for which [sic] were outside the scope of work to include social meetings and personal journalistic exchanges with members of the press. These were also unallowable costs.
b. There is no requirement that there be a contracting officer’s decision or a criminal or civil justice adjudication before PFD seeks an administrative remedy to protect the government from DESE’s continued lack of present responsibility.
c. W. Kirkpatrick and S. Kirkpatrick are contractors within the meaning of FAR section 9.403. Through DESE, they submitted the bid and received the government contract. Additionally, they sought the subcontract with Titan. They conducted business with the government in this instance and may reasonably be expected to conduct business with the government in the future.
d. DESE Research, Inc., W. Kirkpatrick, and S. Kirkpatrick are imputees of one another within the meaning of FAR subsections 9.406-5(a) and 9.406-5(b). S. Kirkpatrick was clearly performing his duties as the President of DESE when he entered into the contract with SMDC as evidenced by his signature on the document; and W. Kirkpatrick was clearly performing his duties as CEO of DESE when he rendered services under the contract.
5. Recommendation. That the Suspension and Debarment Official suspend Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE Research, Inc., by signing the attached letters of notification.
(Butler Mem. at 5). General Wright concurred in her assessment and issued notices of temporary suspension pursuant to FAR § 9.407 for Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE on November 15, 2001. He found that DESE, Hack-ett, and Wallace Kirkpatrick performed lobbying services under the contract and submitted claims for these unallowable costs in violation of § 287 and FAR section 31.205-22(a). He stated:
Counsel for DESE has admitted that these are the services for which Titan billed DESE and which were in turn billed to the government. In addition, other activities were performed and billed to the government which were outside the scope of work of the contract, to include social meetings and personal exchanges with members of the press. These were also unallowable costs. The administrative record that supports the suspension currently consists of this notice and the attached memorandum and supporting documentation.
(November 15, 2001 Letter to Mr. Riggs found at (PEX 1 at l)). He also found that Stephen Kirkpatrick was due to be suspended because his company, Wallace Kirkpatrick, and Hackett performed unlawfully and he (Stephen Kirkpatrick) was “an imputee of DESE and W. Kirkpatrick within the meaning of FAR subsections 9.406-5(a) and 9.406-5(b).” (November 15, 2001 Letter to Stephen Kirkpatrick).
The suspension notices informed the plaintiffs that (1) their names would appear in a government publication listing them as ineligible for government contracts; (2) agencies of the executive branch would not contract with them except for compelling reasons; (3) they could not conduct business as an agent, representative, or as a surety for a third party; and, (4) the Army would examine their affiliations with or relationships to any other organization doing business with the government to determine the impact of those ties on the responsibility, of that organization to be a government contractor or subcontractor. (Suspension Letters). The letters also detailed the plaintiffs’ right of further administrative review under FAR Subpart 9.4. (Id.).
B. Procedural History
The plaintiffs sought no further administrative review. Instead, they filed this action on November 19, 2001, as a “Verified Petition for Preliminary and Permanent Injunction.” (Doc. 1). (PEX 1 at 1). The plaintiffs also filed a “Motion for a Temporary Restraining Order” (doc. 2); a “Declaration of Howell Roger Riggs,” stating that notice to the defendants regarding the motion for a temporary restraining order should not be required prior to the determination of the motion by the court (doc. 3); a “Motion for Expedited Discovery” (doc. 4); and, a “Motion to Require Defendants to File the Administrative Record” (doc. 5).
The court granted the plaintiffs’ motions for an order requiring the defendants to file the administrative record (doc. 6), to expedite discovery (doc. 7), and for a temporary restraining order prohibiting the defendants from publishing the suspension pending. further' order of the court (doc. 8). The case was set for a hearing on the motion for a preliminary injunction on November 28, 2001. ' (Doc. 8 at 2).
The defendants filed a motion for a protective order staying discovery until the court ruled on the defendants’ motion for summary judgment premised on a review of the administrative record. (Doc. 10).
The defendants consented to an extension of the temporary restraining order until January 17, 2002, on November 28, 2001. (Doc. 11). They filed a copy of the “Administrative Record of that action made the basis of this proceeding and a certification that such record constitutes a true and accurate copy of the Administrative Record that was presented to the deciding official.” (Doc. 12). The record at that time consisted of six binders. The plaintiffs also filed a consent to the extension of the temporary restraining order. (Doc. 15).
Premised on the consent of the parties, the court extended the temporary restraining order until January 17, 2002, when the court set the matter for a hearing. (Doc. 13). The court also set the defendant’s motion for a protective order (doc. 10) for a hearing on the same day (doc. 13).
The defendants filed a pleading opposing the plaintiffs’ request for a preliminary injunction. (Doc. 14). Included in the pleading was them motion for summary judgment. (Id).
On January 3, 2002, the plaintiffs filed a “Motion for Leave to File Discovery” from CV 01-J-1633-NE in this case. (Doc. 18). The motion was granted on January 22, 2002. (Doc.23).
The plaintiffs also filed a cross-motion for summary judgment and a response to the defendants’ motion for summary judgment. (Doc. 19).
The defendants on January 10, 2002, moved to strike the plaintiffs’ exhibits that were identified as PEX 36-49. (Doc. 20). The motion also included a reply to the plaintiffs’ response to the defendants’ motion for summary judgment. (Id.). On the same day, the defendants filed a “Corrected Version” of the same motion and response. (Doc. 21).
The court conducted a hearing on the motion for a protective order as scheduled. On January 22, 2002, the court entered an order denying the defendants’ motion for a protective order. (Doc. 24). Specifically, the court stated:
.... From the administrative record and the parties’ arguments, the court finds that the following unusual circumstances exist:
1. A meeting was attended by Mr. Riggs and Ms. Sheryl Butler, where Ms. Butler told Mr. Riggs that the meeting was for the lawyers only, that his clients did not need to be present, and that Wallace Kirkpatrick would be permitted to appear personally prior to any decision regarding Notice of Proposed Debarment. Binder 6 at Tab 3. A decision regarding the suspension was then made without the plaintiffs having an opportunity to be heard. Binder 6 at Tab 5. Counsel for the defendants agreed that no hearing was held.
2. The plaintiffs allege that the debarment and suspension process was undertaken for the purpose of punishment rather than for the reasons the regulations require.
3. Questions of the impartiality of the process and the impartiality of General Wright have been raised. General Costello testified in deposition that he had briefed everyone in the United States Army who would listen to him about this matter, including the Secretary of the Army, the Under Secretary of the Army, the Army Chief of Staff, and the Army Vice-Chief of Staff. The plaintiffs allege that no general officer in the United States Army is untainted by this information and that the manner in which General Wright made his decision is evidence of that. Additionally, the plaintiffs referred to issues regarding General Shinseki’s and General Costello’s relationships with Senator Smith.
4. Questions of whether General Wright considered all of the evidence have surfaced. The report of Ms. Butler, which accompanies General Wright’s decision, makes no mention of all of the material in the administrative record which asserts present responsibility. Allegations of General Wright’s acceptance of the recommendation of Ms. Butler without reviewing it have also been raised.
5. The plaintiff company has passed every other DCA audit without any questions regarding the allocation of cost, including the audit completed this year.
6. Questions have arisen regarding the timing of General Wright’s review. The lead document relied on by the defendants (Binder I) is dated November 15. Lieutenant Colonel O’Keeffe did not date it when he saw it. Colonel McFet-ridge reviewed it on November 13, two days before the document itself is dated. Similarly, Major Shields supposedly received the document on November 14, and nothing indicates that General Wright ever looked at it.
7. Other contracts at SMDC which do not have congressional liaison as an element of performance have had task orders issued under them. Mr. Lumer testified that such an element had to be interpreted into the contracts. Further, Mr. Tiwari’s supervisors, Mr. Reeves and Mr. Dobbs considered the work in question to be within the contract.
8. The statutory authority relied upon by the procurement fraud division for debarment of the plaintiffs, 18 U.S.C. § 1913, does not apply to contractors, but only to civil servants.
9. Other incidents exist which are questionable, such as Ms. Butler’s reference to the plaintiffs’ submissions as “four volumes of manure,” the failure to focus the decision on the issue of present responsibility, and the defendants’ position that the plaintiffs’ vigorous defense of the charges is evidence of guilt.
(Doe. 24 at 1-4). The parties agreed that the court would continue the temporary restraining order until a new hearing date on the merits could be set. (Id.).
On January 28, 2002, the defendants filed a “Second Motion for Protective Order,” requesting that the court issue instructions “prohibiting: ' (1) any inquiry into General Wright’s deliberative processes and (2) any inquiry with regard to any legal advice General Wright may have received from Colonel McFetridge as his senior legal advisor.” (Doc. 25 at 10-11). The motion was summarily denied on the same day. (Doc. 26). A substantial amount of discovery was conducted in this matter by the plaintiffs.
On February 11, 2002, the plaintiffs submitted a “Notice of Filing” (First) with the Clerk of the Court. Because of the numerous exhibits that were attached to the “Notice,” the Clerk gave each exhibit a separate docket number. The exhibits include plaintiffs’ exhibit numbers PEX 50-66.
On February 12, 2002, the defendants filed a motion to exclude plaintiffs’ exhibits 1-56. (Doc.49).
On February 14, 2002, the plaintiffs filed a “Second Notice of Filing.” Included in this submission were various exhibits which were filed by the Clerk of the Court as documents 50-64. PEX 78-84 and 87-89 were not included as listed on the notice.
This case was set for a hearing on the plaintiffs’ motion for a preliminary injunction on February 14, 2002. (Doc. 30). The hearing was conducted as scheduled. (Doc. 67). At the hearing, the court admitted PEX 1-89. Shortly thereafter, the case was reassigned to another judge prior to any ruling on the motion for a preliminary injunction.
On March 1, 2002, the plaintiffs filed a “Third Notice of Filing.” (Doc. 69). Included in this filing were labels, a bound volume with exhibits PEX 94-149, and a video deposition and transcript of the testimony of Jay Garner (PEX 150, 150A & B). The plaintiffs also filed a “Notice of Filing of Evidentiary Submission,” directing the court to specific evidentiary references in the record that the court should focus its attention. (Doc. 70).
On March 15, 2002, the defendants filed a “Notice of Filing of Evidentiary Submission,” referencing PEX 50-52.
On April 2, 2002, the defendants requested that the court reconsider its admission of exhibits 1-89 at the February 14, 2002 hearing and objected to any use of exhibits 90-150B. (Doc. 72). The defendants further requested oral argument on their motion for summary judgment. (Id.). The ease was set for a status conference on May 2, 2002. (Doc. 73). The plaintiffs filed a response to the defendants’ motion for reconsideration. (Doc. 75). The defendants filed a reply to the plaintiffs’ response. (Doc. 77).
The defendants filed a request for an expedited hearing on the plaintiffs’ request for a preliminary injunction. (Doc. 78). They also informed the court that the voluntary extension of the temporary restraining order was scheduled to expire on July 19, 2002. (Doc. 78).
On July 24, 2002, the case was reassigned to the undersigned magistrate judge. (Doc. 79). The parties have consented to final dispositive jurisdiction being within the authority of this court, pursuant to 28 U.S.C. § 636. (Doc. 82).
On August 5, 2002, the case was set for a hearing on the issue of what evidence would be considered by the court in ruling on the motions for preliminary injunction and for summary judgment. (Doc. 81). After a short discussion, the court determined that due to the voluminous record and the nature of the arguments, the case would be continued for further review. The parties agreed to a voluntary continuation of the temporary restraining order until the end of September 2002.
The pending motions were set for a hearing on September 16, 2002. (Doc. 83). The parties presented evidence and arguments concerning the pending motions over two and one-half days. At the conclusion of the hearing, the court informed the parties of its decision to retain jurisdiction of this matter, to remand the same for further review pursuant to the applicable administrative regulations, and to enter a preliminary injunction.
The court then entered its Memorandum Opinion on September 27, 2002. (Doc. 84). In its Opinion, this court found that the “plaintiffs ha[d] not made the requisite ‘strong showing of bad faith or improper behavior by the agency’ to warrant the inclusion of the supplemental record (the PEX documents)” in this court’s consideration and that “the record [did] not support a conclusion that the decisionmaker in this case, General Wright, acted in bad faith or had an improper motive in granting the temporary suspension.” (Doc. 84 at p. 15). At the time of its Memorandum Opinion, the court could not find that General Wright’s decision to temporarily suspend the plaintiffs was arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with the law, and further noted that to do so would be imprudent because the parties had not been afforded the full opportunity to pursue and present the applicable legal arguments in the administrative process that the law provides. Therefore, the court remanded the matter to General Wright for further proceedings so that General Wright could consider the new information and arguments that were advanced in this court in opposition to the suspension; specifically, the extensive record compiled by the parties as a consequence of the court allowed discovery and the plaintiffs’ arguments as set out in the hearing on the motions that the conduct at issue did not involve “lobbying” and that it was authorized by government officials. (Doc. 84 at pp. 20-21). Additionally, General Wright had the opportunity to review and determine the plaintiffs’ present responsibility to continue in government contracting. The court maintained jurisdiction over the action while the review was pending. (Doc. 84 at p. 21).
Because the court found that granting the motion for preliminary injunction would do no harm to the defendants’ concerns in this matter and that the public interest would best be served by an expeditious review of the issues by the Army while the status quo was preserved, it granted the plaintiffs’ motion for preliminary injunction. (Doc. 84 at p. 24).
Thereafter, on October 17, 2002, plaintiffs’ counsel Howell Roger Riggs wrote General Wright a letter formally requesting that he terminate the plaintiffs’ suspension ab initio the plaintiffs committed no offense that justified suspension, DESE was and always had been “presently responsible,” and there was never any need for immediate action to protect the government so as to justify the suspension decision. (Doc. 89, p. 3). On October 25, 2002, General Wright conducted an Administrative Hearing, which Sheryl Butler on behalf of the Agency, Howell Roger Riggs and Nathan Harvey on behalf of the plaintiffs, Lieutenant Colonel Gregory Coe and Christine McCommas of the Procurement Fraud Division attended. Also present were Wallace Kirkpatrick, Stephen Kirkpatrick, Michael Kirkpatrick, and Wil Et-bauer, all of DESE Research. Presentations were made by Howell Roger Riggs, Wallace Kirkpatrick, Stephen Kirkpatrick, Harvey Nathan, Michael Kirkpatrick, and Wil Etbauer. (Administrative Hearing Transcript at pp. 2-4).
After the hearing, General Wright issued a written decision on December 19, 2002, stating that “[w]hile I find the original suspension actions to be justified, based on my careful review of the extensive record before me, I find that the facts and circumstances in this case warrant a termination of the suspension action.” (Doc. 89 at Exhibit B; Doc. 92 at DEX 2). On January 13, 2003, the plaintiffs petitioned General Wright to reconsider his decision not to terminate the suspensions ab initio, as well as other portions of his decision, and submitted additional written matters for his consideration. (Doc. 89, Exhibit C). On January 16, 2003, General Wright issued a written decision refusing to alter or amend any part of his December 19, 2002 decision because he found “no compelling circumstances warranting a termination of the suspensions ab initio.” (Doc. 89, Exhibit 5; Doc. 92 at DEX 3).
Thereafter, on January 24, 2003, the plaintiffs filed their motion asking that the court provide them additional relief from General Wright’s final determination. (Doc. 89). The plaintiffs specifically state that they come before the court seeking “to clear their name and remove the cloud that hangs over their futures as a result of General Wright’s suspension decision.” (Doc. 89, p. 5). On March 3, 2003, the defendants filed their opposition to the plaintiffs’ motion for additional relief, as well as a motion to strike extra-record evidence offered by the plaintiffs and a motion for summary judgment (doc. 91) and their exhibits in support thereof (doc. 92). The plaintiffs filed their reply (doc. 93) on March 17, 2003, and the court took the matter under submission.
II. STANDARD OF REVIEW
As • set forth in this court’s pervious Memorandum Opinion, the applicable standard to be applied in the present case is as follows:
The APA accords great deference to agency actions. Preserve Endangered Areas of Cobb’s History, Inc. v. U.S. Army Corps of Eng’rs, 87 F.3d 1242, 1246 (11th Cir.1996); Organized Fishermen of Fla. v. Franklin, 846 F.Supp. 1569, 1573 (S.D.Fla.1994). This is true even at the summary judgment stage. Cobb’s History, 87 F.3d at 1246. The APA provides that a reviewing court shall “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 .... ” 5 U.S.C. § 706(2).
Under this standard, a reviewing court should overturn an agency action only when it concludes there has been a clear violation of duty by agency officials. Latecoere Int’l, Inc. v. U.S. Dept. of the Navy, 19 F.3d 1342, 1356 (11th Cir.1994). If the court finds a reasonable basis for the agency’s action, it should “stay its hand even though it might, as an original proposition, have reached a different conclusion ....” Id. at 1356 (quotation and citation omitted). The court should not generally conduct a de novo inquiry nor reach its own conclusions. Cobb’s History, 87 F.3d at 1246 (citing Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985)). ’Rather, the court should decide on the basis of the record the agency provides whether there is a rational basis for the agency’s decision. Lorion, 470 U.S. at 744, 105 S.Ct. 1598.
Conversely, if the record before the court does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court cannot evaluate the challenged action on the basis of the record before it, it may set aside the agency decision. Cobb’s History, 87 F.3d at 1246. In those circumstances the usual action for the court-is to remand the case to the agency for further explanation or investigation. Id. • To determine whether an agency action is arbitrary and capricious:
[T]he reviewing court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. This inquiry must be searching and careful, but the ultimate standard of review is a narrow one.... Administrative decisions should be set aside in this context ... only for substantial procedural or substantive reasons as mandated by statute ... not simply because the court is unhappy with the result reached. The agency must use its best judgment in balancing the substantive issues. The reviewing court is not authorized to substitute its judgment for that of the agency concerning the wisdom or prudence of the proposed action.'
Fund for Animals, Inc. v. Rice, 85 F.3d 535, 541-42 (11th Cir.1996) (quoting North Buckhead Civic Ass’n v. Skinner, 903 F.2d 1533, 1538-39 (11th Cir.1990)). To prove an agency’s decision was arbitrary and capricious, the challenging party must show the record is devoid of reasonable evidence supporting the agency’s decision. Franklin, 846 F.Supp. at 1573.
Ordinarily, a court should confine its review to the administrative record, which consists of all materials before the agency at the time of decision. Id; James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1095 (C.A.D.C.1996), cert. denied, 519 U.S. 1077, 117 S.Ct. 737, 136 L.Ed.2d 676 (1997). Review beyond the administrative record is justified if (1) the record does not adequately explain the agency’s action, (2) it appears the agency relied on materials not included in the record, (3) it is necessary to clarify complex, technical terms involved in the decision, or (4) the challenging party has made a strong showing of bad faith or improper behavior by the agency. Animal Defense Council v. Hodel, 840 F.2d 1432, 1436-38 (9th Cir.1988); Franklin, 846 F.Supp. at 1573.
Miccosukee Tribe of Indians of Florida v. United States, 1998 WL 1805539, *13-14 (S.D.Fla.1998). See also Water Works & Sewer Board of City of Birmingham v. U.S. Dept. of Army, Corps of Engineers, 983 F.Supp. 1052, 1065 (N.D.Ala.), aff'd, 162 F.3d 98 (11th Cir.1998) (Table), cert. denied, 528 U.S. 951, 120 S.Ct. 374, 145 L.Ed.2d 292 (1999).
As just stated, the general rule is that the reviewing court is limited to the administrative record. “There are exceptions to the general rule. See P [reserve ] E [ndangered ] A [reas of] C [obb’s ] H [is-tory, Inc.], 87 F.3d [1242,] 1246-47 & n. 1 [ (11th Cir.1996) ] (citing Animal Defense Council v. Hodel, 840 F.2d 1432, 1436-37 (9th Cir.1988)). Such exceptions are ‘narrowly construed,’ however, and the party seeking discovery has ‘a heavy burden to show that supplementation is necessary.’ United States v. Amtreco, Inc., 806 F.Supp. 1004, 1006 (M.D.Ga.1992) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971)).” Alabama-Tombigbee Rivers Coalition v. Norton, 2002 WL 227032, *3 (N.D.Ala.2002).
While this court, through Judge Inge Johnson, determined that additional discovery was necessary in this case, the court was of the opinion that the appropriate use of the additional discovery was with General Wright and not this court. (Doc. 84. at pp. 15 & 20). Therefore, the court now has before it the administrative record, as it existed when General Wright made his initial decision to suspend the plaintiffs from government contracting, as well as the administrative record that General Wright relied upon when he reviewed the matter at the court’s direction.
The court, however, declines to consider the extra-record evidence, particularly the declaration of Harry D. Cleaver, Jr. (doc. 89, exhibit F), since it was not before General Wright when he conducted his January 16, 2003 review. Accordingly, to that extent, the defendants’ motion to strike is due to be granted.
III. DISCUSSION
In their “Motion for Additional Relief’ (doc. 89), the plaintiffs seek an order of the court providing as follows:
.... (1) finding that Plaintiffs committed no offense which justified their being suspended from government contracting, (2) voiding ab initio General Wright’s November 15, 2001 suspension of Plaintiffs for allegedly billing the government for unallowable costs incurred during the performance of contract DASG60-97-C0054 (the “Contract”), (3) permanently enjoining Defendants from indicating that Plaintiffs have ever been suspended, and (4) finding Plaintiff to be the “prevailing party” in this action, as that phrase is defined by the Equal Access to Justice Act, 5 U.S.C. § 504 (“EAJA”).
(Doc. 89, p. 1). The plaintiffs acknowledge that the Administrative Record that is now before the court is complete and that the case is ripe for judicial review. (Doc. 89, p. 7). The plaintiffs request this additional relief because General Wright’s suspension of the termination is only “technically less harmful ... than was his original decision, substantively, his position is unchanged ... [and] without relief from this [c]ourt, Plaintiffs reputations will be irretrievably besmirched and they face the prospect of financial ruin.” (Doc. 89, p. 7).
A. Unallowable Costs
General Wright’s December 19, 2002, and January 16, 2003, decisions affirm his finding that the plaintiffs violated FAR § 31.205-22(a), which provides that costs associated with the following activities are unallowable:
(3) Any attempt to influence (i) The introduction of Federal ... legislation, or (ii) the enactment or modification of any pending Federal ... legislation through communication with any member or employee of the Congress , or with any government official or employee in connection with a decision to sign or veto enrolled legislation[.]
B. Contract Scope of Work
General Wright found that the activities described within the Hackett Reports were not within the Contract Scope of Work (“SOW”). The plaintiffs vehemently disagree with this finding. However, instead of articulating how those activities are within the SOW, the plaintiffs argue that the SOW was “negotiated, reviewed, and approved by the SMDC contracts office and legal office” and that the subcontract SOW was approved by the Defense Contract Administration Agency in Birmingham, Alabama. (Doc. 89, p. 8).
In support of their argument that the submitted costs were within the contract SOW, the plaintiffs argue that (1) the Titan subcontract was made at the request of the government (Tiwari); (2) all of Mr. Hackett’s contacts with members of Congress or their staff were at the direction of the government Program Manager (Ti-wari) and were in support of an Army program that had fierce opponents and supporters; (3) Tiwari and Hackett’s efforts resulted in $137 million of funding over several years; (4) Tiwari’s supervisor, William C. Reeves believes the costs fall within the SOW provisions; and, (5) Tiwari was directed by the SMDC Commander to get the funds needed for his program any way he could or his job would be eliminated and other SMDC officials also requested that Tiwari contact members of Congress or their staffs to restore and fund the KE-ASAT program. (Doc. 89, pp. 7-13).
The defendants retort that “it is fantasy of epic proportion to imply an authorization to conduct lobbying activities from a plain reading of the plaintiffs’ technically-based scopes of work at issue in this case.” (Doc. 91, p. 29). While the defendants see no need to delve any further than that into the issue, they offer further that any direction Tiwari may have made was in direct conflict with the limitations on his authority under the FAR. Furthermore, the defendants argue, the plaintiffs should have known that Tiwari was not authorized to direct them to perform duties outside their scope of work and should have refused his direction. Instead of refusing to participate, the plaintiffs have maintained that their activities were not in violation of FAR 31.205-22.
The court agrees with the defendants. None of the plaintiffs’ arguments support the contention that the costs submitted were within the SOW. What the arguments do support is that Tiwari prompted the actions by the plaintiffs. However, Tiwari’s direction does not render the plaintiffs justified in their actions if the activities described within the Hackett Reports were in violation of FAR 31.205-22.
C. FAR § 31.205
The plaintiffs next argue that General Wright has never explained why the Hack-ett Reports constitute costs incurred in the furtherance of “lobbying” and that the activities described therein do not implicate any of the six types of unallowable activities described in FAR § 31.205.22(a) (48 C.F.R. § 31.205-22(a)). Again, the pertinent part of that section provides:
(a) Costs associated with the following activities are unallowable:
(3) Any attempt to influence (i) the introduction of Federal, state, or local legislation, or (ii) the enactment or modi-fieation of any pending Federal, state, or local legislation through communication with any member or employee of the Congress or state legislature (including efforts to influence state or local officials to engage in similar lobbying activity), or with any government official or employee in connection with a decision to sign or veto enrolled legislation....
48 C.F.R. § 31.205-22(a)(3). However, certain activities are exempted from this rule. The relevant regulation, 48 C.F.R. § 31.205 — 22(b)(1), provides in pertinent part:
(b) The following activities are excepted from the coverage of (a) above:
(1) Providing a technical and factual presentation of information on a topic directly related to the performance of a contract through hearing testimony, statements or letters to the Congress or a state legislature, or subdivision, member, or cognizant staff member thereof, in response to a documented request (including a Congressional Record notice requesting testimony or statements for the record at a regularly scheduled hearing) made by the recipient member, legislative body or subdivision, or a cognizant staff member thereof; provided such information is readily obtainable and can be readily put in deliverable form; and further provided that costs under this section for transportation, lodging or meals are unallowable unless incurred for the purpose of offering testimony at a regularly scheduled Congressional hearing pursuant to a written request for such presentation made by the Chairman or Ranking Minority Member of the Committee or Subcommittee conducting such hearing.
48 C.F.R. § 31.205-22(b)(l). The pertinent regulations further provide:
(d) Contractors shall maintain adequate records to demonstrate that the certification of costs as being allowable or unallowable (see 42.703-2) pursuant to this subsection complies with the requirements of this subsection.
(e) Existing procedures should be utilized to resolve in advance any significant questions or disagreements concerning the interpretation or application of this subsection.
48 C.F.R. § 31.205-22(d) & (e). The plaintiffs summarily assert that “DESE did not submit costs for attempts to influence elections or legislation and the Hackett Reports do not describe activities that were ‘in preparation for an effort to engage in unallowable activities.’ ” (Doc. 89, p. 13).
1. Byrd Amendment
The plaintiffs then argue that, even if the activities described in the Hackett Report were in violation of FAR, the Byrd Amendment, 31 U.S.C. § 1352, limits the definition of lobbying to specific contract actions and does not include contacts related to procurement programs or “program lobbying” in its definition of “lobbying.” (Doc. 89, p. 14). While the Byrd Amendment might refer only to specific contract actions, contrary to what the plaintiffs would have the court conclude, the court does not find that the Byrd Amendment is applicable to the instant case.
The Byrd Amendment, entitled “Limitation on Use of Appropriated Funds to Influence Certain Federal Contracting and Financial Transactions,” states in relevant part:
(a)(1) None of the funds appropriated by any Act may be expended by the recipient of a Federal contract, grant, loan, or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any Federal action described in paragraph (2) of this subsection.
31 U.S.C. § 1352(a)(1). The “Federal actions” to which § 1352 is explicitly limited are as follows:
(a)(2) The prohibition in paragraph (1) of this subsection applies with respect to the following Federal actions:
(A) The awarding of any Federal contract.
(B) The making of any Federal grant.
(C) The making of any Federal loan.
(D) The entering into of any cooperative agreement.
(E) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
31 U.S.C. § 1352(a)(2).
The Byrd Amendment further provides that “[t]he Director of the Office of Management and Budget [OMB], after consulting with the Secretary of the Senate and the Clerk of the House of Representatives, shall issue guidance for agency implementation of, and compliance with, the requirements of this section.” 31 U.S.C. § 1352(b)(6). Thereafter, on December 20, 1989 (1989 memo), and June 15, 1990 (1990 memo), OMB, Office of Federal Procurement Policy (OFPP), issued memorandums designed to clarify the application of § 1352. Plaintiffs ask the court to read § 1352 and the 1990 OMB memorandum together to eviscerate the FAR’s definition of “lobbying,” and even go so far as to say that § 1352 “amends the meaning of FAR Section 31.205-22.” (Doc. 89, p. 14). The court is unpersuaded by this argument. Nowhere in the FAR or the OMB memos is there mention of an intention to amend the FAR. Absent a provision amending the FAR, the court is disinclined to amend it on its own, and is certainly disinclined to determine that General Wright acted arbitrarily and capriciously in refusing to read the memos and the Byrd Amendment in conjunction with the FAR to amend the FAR.
Neither § 1352 nor the OMB memos define “lobbying.” However, the 1989 memo explicitly states that “costs that are specifically unallowable under the provision of the FAR are not made allowable under the requirements in the OMB guidance.” 54 Federal Register at 52308. The OMB memoranda, then, only serve to clarify the limits of § 1352, and do not to change the definition of “lobbying.”
In his order, General Wright does not undertake any analysis of the Byrd Amendment, the OMB memos, or their relationship to the FAR. Instead, he states:
I have reviewed the Byrd Amendment ... and the arguments that the lobbying activities in question were permissible since they were activities in support of a ‘program’ and not for the specific contract in question. I have also reviewed the assertion that the Office of Federal Procurement Policy (OFPP) Memo of June 14, 1990 (55 Federal Register 24540), purports to amend the meaning of the FAR by clarifying and extending it to encompass and nullify the Federal Government’s allowability rules pertaining to lobbying as embodied in FAR 31.205-22. Based on my review of these authorities, I find that the FAR provision remains the applicable regulatory guidance for determining lobbying expenses in this case and is not superseded by § 1352 or the OFPP Memo.
(General Wright’s December 19, 2002 letter terminating the suspension at ¶ 7 (“December 19 letter”)). The court finds that General Wright’s explanation is sufficient. General Wright was not required to undertake an in-depth analysis of the above-mentioned materials. Instead, he was charged with determining whether the plaintiffs submitted unallowable costs to the government and whether the plaintiffs were “presently responsible.” He references the OMB memorandum and the Byrd Amendment only by way of explanation that he reviewed them and found them not applicable in this case. Nothing further is required.
The plaintiffs further argue that the activities described in the Hackett Reports were not “lobbying contacts.” (Doc. 89, p. 15). The plaintiffs base this argument on 2 U.S.C. § 1602, which excepts from the definition of lobbying communications “made by a public official acting in the public official’s capacity” as well as communications “compelled by a federal contract.” 2 U.S.C. § 1602(8)(B)(i) and 2 U.S.C. § 1602(8)(ix). Although the plaintiffs assert that “ample evidence submitted ... and contained in the Administrative Record demonstrates clearly that the contacts described in the Hackett Reports were both within the scope of work of the DESE contract with the Army and the scope of the Titan subcontract with DESE,” (doc. 89, p. 16), the court disagrees. The abundance of evidence shows that Tiwari directed the communications that are contained in the Hackett Reports, but the plaintiffs have failed to establish that Tiwari was actually authorized to make that direction. The court is sympathetic to the plaintiffs’ argument that
[t]here is no evidence whatsoever in the Hackett Reports that either Wallace Kirkpatrick or Mr. Hackett lobbied for the award of any specific contract for their companies; at all times, they were supporting the KE-AST Program Manager, Mr. Tiwari, and helping the Army obtain its goals relative to the KE-ASAT Program. Clearly, merely providing support to an executive agency— at the direction of a program head — ■ cannot reasonably be described as lobbying.
(Doc. 89, p. 16). However, the task before the court is to determine whether General Wright acted arbitrarily and capriciously, abused his discretion, or acted otherwise not in accordance with the law when he (1) temporarily suspended the plaintiffs from government contracting, and subsequently, when he (2) refused to terminate the suspension ab initio, and not to substitute its judgment for General Wright’s judgment.
General Wright found that neither 2 U.S.C. § 1602 nor its definitions apply to a suspension action governed by the FAR, and that, even if it did, “neither Mr. Hack-ett, nor Mr. Kirkpatrick would fall within the purview of the statute since they are not public officials.” (Doc. 89, Ex. B, p. 2). However, the plaintiffs argue that General Wright did not provide an adequate explanation why § 1602 does not apply and that FAR 31.205-22 does not define “lobbying,” but the Army has described the activities in the Hackett Reports as “lobbying.” (Doc. 89, p. 16). Because § 1602 is Congress’s most recent definition of “lobbying,” the plaintiffs argue that it should be the operative definition. (Doc. 89, p. 16).
In response, the defendants assert that the plaintiffs’ analysis is faulty and must fail. (Doc. 91, p. 26). Specifically, the defendants argue that
The Lobbying Disclosure Act has no relevance to plaintiffs’ suspension ae-tions under the FAR. The Act requires “lobbyists” and “lobbying firms,” as those terms are defined in the Act, to register with the Secretary of the Senate and the Clerk of the House, and to file semiannual reports with the Secretary and the Clerk concerning their activities, including estimates of money paid or expended for lobbying activities during the reporting period. Willful noneompliance with the Act is reported to the Department of Justice and non-compliant lobbyists and lobbying firms can be punished with civil fines up to $50,000. Further, the Act’s definition of “lobbying contacts” contemplates that such “contacts” would be made by professional lobbyists and groups on behalf of their “clients,” hence the need for registration and monitoring under the Act.
The scope, intent, and provisions of the Act, as shown, are wholly unrelated to the FAR and the plaintiffs’ suspension actions under the FAR. Plaintiffs and their subcontractors were never required under the DESE contract to serve as a “lobbyist” or “lobbying firm” as discussed under the Act. They were never subject to the registration and reporting requirements under the Act. The Act clearly indicates that the definitions cited by plaintiffs as controlling over the FAR are definitions which only control the Act itself. 2 U.S.C. § 1602. Defendants assert that DESE was never subject to the Act in the first place and cannot reasonably rely upon the Act now to bolster its argument that its lobbying and billing activities are not governed by the FAR.
(Doc. 91, pp. 26-27). Further, the defendants argue, that the definition of “lobbying” in the FAR was provided for by the OMB in 1984. The defendants refer to a Federal Acquisition Circular put out April 27, 1984, which amended the FAR “with respect to the lobbying cost principle in the FAR subpart that covers contract cost principles in contracts with commercial organizations” in a manner consistent with the OMB circular A-122. {Id. at pp. 23-25). Therefore, the lobbying cost principle in A-122 was edited to conform to the FAR format and the cost principle in FAR 31.205-22 was edited to define “unallowa-ble lobbying cost activity” consistent with the OMB circular. 49 Federal Register 18278. (See DEX 9).
Although the plaintiffs argue that the FAR does not define “lobbying,” FAR 31.205-22 is entitled “Lobbying and political activity costs.” 48 C.F.R. § 31.205-22. The only reasonable inference one could draw is that the costs not allowed by that provision are “lobbying and political activity costs.” 48 C.F.R. § 31.205-22(a). Because the Federal Acquisition circular makes it clear that the definition of “lobbying costs” in the FAR is the definition that applies to contract cost principles in contracts with commercial organizations, the court finds that it is the definition applicable to the instant case.
3. Constructive Change Doctrine
The plaintiffs next complain that General Wright never considered whether FAR 31.205-22 was subject to the constructive change doctrine. (Doc. 89, p. 17). As the plaintiffs point out,
the constructive change doctrine is made up of two elements — the “change” element and the “order” element. To find the change element we must examine the actual performance to see whether it went beyond the minimum standards demanded by the terms of the contract. But, this is not the end of the matter.
The “order” element is also a necessary ingredient in the constructive change concept. To be compensable under the changes clause, the change must be one that the government ordered the contractor to make’. The Government’s representative, by his words or deeds, must require the contractor to perform work which is not a necessary part of his contract. This is something which differs from opinions, advice, comments, suggestions, or opinions which Government engineering or technical personnel frequently offer to a contractor’s employees.
(Doc. 89, p. 18 (citing In re Indus. Research Assocs., Inc., 68-1 BCA ¶ 7,069 32,-679, 32,685-86)). The plaintiffs argue, therefore, that because the lobbying activities in the Hackett Reports were not required in DESE’s contract, they have clearly satisfied the ‘change’ element. (Doc. 89, p. 18). Further, they argue, because Tiwari ordered the activities that caused the suspension, the ‘order’ element is also met. (Id).
The defendants retort that the constructive change doctrine is inapplicable to this case because Mr. Tiwari had no actual, apparent, or implied actual authority to contract. In support of their argument, the defendants cite a Court of Federal Claims case that held:
As a threshold matter, to succeed on a constructive change claim, a contractor must demonstrate that it notified the Government that it perceived a given order as a change of the contract’s terms and that the person who ordered the change possessed the requisite authority. As a substantive matter, the contractor also must prove that the putative change is actually a change in the terms of the agreement ....
Section I of the contract incorporates the Notification of Changes Clause, FAR § 52.243.7 (Apr.1984). Within 10 days of any government action ... considered to be a contract change, [the contractor] is required to provide written notice to the contracting officer of
(1) The date, nature, and circumstances of the conduct regarded as a change;
(2) The name, function, and activity of each Government individual and Contractor official or employee involved in or knowledgeable about such conduct;
(3) The identification of any documents and the substance of any oral communication involved in such conduct;
(4) In the instance of alleged acceleration of scheduled performance or delivery, the basis upon which it arose;
(5) The particular elements of contract performance for which the Contractor may seek an equitable adjustment under this clause, including—
(i) What contract line items have been or many [sic] have been affected by the alleged change;
(ii) What labor or materials or both have been or may be added, deleted, or wasted by the alleged change;
(iii) To the extent practicable, what delay and disruption in the manner and sequence of performance and effect on continued performance have been or may be caused by the alleged change;
(iv) What adjustments to the contract price, delivery schedule, and other provisions affected by the alleged change are estimated; and
(6) The Contractor’s estimate of the time by which the Government must respond to the Contractor’s notice to minimize cost, delay or disruption of performance.
Northrop Grumman Corp. v. United States, 47 Fed.Cl. 20, 29-30 (2000). Although the DESE contract does not incorporate FAR § 52.243-7, it does incorporate FAR § 52.243-2, Alternate II, which provides:
(a)The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the day, days of the week, etc.).
(3) Place of performance of the services.
(4) Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured ....
(5) Method of shipment ....
(6) Place of delivery.
(b) If any such change causes an increase or decrease in the estimated cost of, or the time required for, performance or any part of the work under this contract, whether or not changed by the order, or otherwise affects any other terms and conditions of this contract, the Contracting Officer shall make an equitable adjustment in the (1) estimated cost, delivery or completion schedule, or both; (amount of any fixed fee); and (3) other affected terms shall modify the contract accordingly.
(c) The Contractor must assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract.
(d) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed.
(e)-Notwithstanding the terms and conditions of paragraphs (a) and (b) above, the estimated cost of this contract and, if this contract is incrementally funded, the funds allotted for the performance of this contract, shall not be increased or considered to be increased except by specific written modification of the contract indicating the new contract estimated cost and, if this contract is incrementally funded, the new amount allotted to the contract. Until this modification is made, the Contractor shall not be obligated to continue performance or incur costs beyond the point established in the Limitation of Cost or Limitation of Funds clause of this contract.
Reading these two FAR provisions in the context of the “constructive change” doctrine makes it clear that the doctrine is wholly inapplicable to the circumstances in the instant case. The court does not find, and the plaintiffs have not presented any law to persuade the court, that the constructive change doctrine operates to rectify an otherwise unallowable billing. Instead, the constructive change doctrine seems to be an equitable remedy given to contractors that perform functions outside of their contract scope of work and incur additional expenses as a result of the additional work.
D. False Claims Act
The plaintiffs next argue that, although they asked General Wright to do so, he never reconsidered his original conclusion that the plaintiffs violated the False Claims Act. (Doc. 89, pp. 7, 20-21). In his Notice of Suspension, General Wright concluded that “DESE and Mr. Kirkpatrick submitted claims for these unallowable costs in violation of 18 U.S.C. 287 [False Claims Act] and FAR section 31.205-22(a).” (PEXlatp. 1). The plaintiffs point out that General Wright made a legal conclusion that the plaintiffs violated a criminal statute in the absence of a erim-inal conviction. (Doc. 89, p. 20). . On this issue, the plaintiffs argue that:
In order for General Wright to conclude that Plaintiffs violated the False Claims Act, he was required to find that Plaintiffs knowingly and willfully submitted claims which were false, fictitious, or fraudulent. Even if the costs the Army contended were unallowable constituted false, fictitious, or fraudulent claims, the Army was required to find that the costs were submitted intentionally with knowledge of their falsity.
None of General Wright’s official statements, from the original suspension to the January 16, 2003 letter rejecting Plaintiffs’ final request for reconsideration, contain any analysis as to why Plaintiffs’ activities (and which activities) implicated or constituted violations of the False Claims Act.... Plaintiffs are at a loss as to how General Wright could possibly have concluded that they intentionally defrauded the government (which is essentially what he has accused Plaintiffs of doing by invoking the False Claims Act) by submitting the costs the Army has deemed “unallowable.”
This issue is typical of the Army’s actions in this case. General Wright has found Plaintiffs guilty of violating a criminal statute yet has never explained how he reached that conclusion, and has refused to retract his finding, even after he was aware no criminal prosecution or even an indictment would be forthcoming. There is not now and never was any evidence to support application of the False Claims Act to Plaintiffs’ activities. General Wright and Ms. Butler admit as much by their failure to reveal why they think the statute applies to Plaintiffs. This Court should issue an order finding that Plaintiffs have not violated the False Claims Act.
(Doc. 89, pp. 20-21) (italics in original).
The court agrees in part with the plaintiffs’ assertions. In order to demonstrate a violation of § 287, it must be shown “(1) the [plaintiffs herein] knowingly made and presented to a department or agency of the United States a false, fraudulent or fictitious claim against the United States; and (2) the[y] acted with knowledge that the claim was false, fraudulent or fictitious.” United States v. Abbott Washroom Systems, Inc., 49 F.3d 619, 624 (10th Cir. 1995). The evidence must further show that the plaintiffs acted wilfully. Eleventh Circuit Pattern Jury Instructions: Criminal, § 11.2 (2003). General Wright’s con-clusory finding that the plaintiffs violated a criminal statute, without more, is arbitrary and capricious. Not a shred of evidence exists in this record that would indicate that the plaintiffs willfully submitted claims that were false, fictitious, or fraudulent. Even more, nowhere in the record does the Government make the assertion that the plaintiffs made fraudulent, fictitious, or false claims aside from the conclu-sory assertion above.
While the finding that the plaintiffs violated the False Claims Act appears to be arbitrary and capricious given the lack of evidence in the record to support such a claim, that finding alone does not render General Wright’s ultimate decision — to suspend the plaintiffs — arbitrary and capricious. However, the court is sympathetic to the plaintiffs’ belief that being accused of “intentionally defrauding the government” is not a stigma that one would desire to have attached to their reputation. As such, the court finds that General Wright’s conclusion on this aspect of his decision is without basis and therefore must be removed from the administrative findings. Accordingly, it will be so ordered.
E. Termination Ab Initio
1. Present Responsibility
A government contractor suspected of fraud or criminal activity may be debarred from contracting with the government. Upon a showing of “adequate evidence,” a contractor suspected of wrongdoing may be temporarily suspended from entering new contracts with the government. Specifically, there must be a showing of “adequate evidence” of the commission of fraudulent activity or a criminal offense in connection with the performance of the contract. 48 C.F.R. §§ 9.407-l(a) & (b) & 9.407-2(a)(l). A contractor may also be suspended if there is “adequate evidence!’ of conduct “that affects the present responsibility of a Government contractor or subcontractor.” 48 C.F.R. § 9.407-2(c). The regulations further provide:
.... The existence of a cause for suspension does not necessarily require that the contractor be suspended. The suspending official should consider the seriousness of the contracto