Vero Technical Support, Inc. v. United States Department of Defense

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-14889 AUG 10, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 2:10-cv-14162-DLG
VERO TECHNICAL SUPPORT, INC.,
A Florida Corporation,
Plaintiff-Appellant,
versus
UNITED STATES DEPARTMENT OF DEFENSE,
UNITED STATES DEPARTMENT OF THE AIR FORCE,
UNITED STATES DEPARTMENT OF THE ARMY
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 10, 2011)
Before EDMONDSON and MARCUS, Circuit Judges, and FAWSETT,* District
Judge.
*Honorable Patricia C. Fawsett, United States District Judge for the Middle District of
Florida, sitting by designation.
PER CURIAM:
Appellant Vero Technical Support, Inc. (“VTS”) provided weather forecasting,
weather observation, maintenance, and support services at eleven Army bases
throughout the United States under a contract overseen by Appellee United States
Department of the Air Force (“Air Force”).1 Prior to the expiration of this contract,
VTS filed suit for declaratory and injunctive relief in the United States District Court
for the Southern District of Florida, seeking to permanently enjoin and set aside the
Appellees’ decision to insource the scope of the work previously performed by VTS
under the contract. VTS now appeals the district court’s dismissal of its action for
lack of subject matter jurisdiction. For the reasons set forth below, we affirm.
I. Facts
In its complaint, VTS asserts that the Appellees’ insourcing decision should be
set aside as arbitrary and capricious because the Appellees failed to comply with the
procedures they adopted pursuant to 10 U.S.C. §§ 129a and 2463 in reaching their
decision. The district court dismissed VTS’s complaint for lack of subject matter
jurisdiction, finding that the allegations of VTS fall within the scope of the Tucker
Act, 28 U.S.C. § 1491(b)(1), and therefore the Court of Federal Claims (“COFC”) has
1
The complaint alleges that although VTS performed the contract services at Army bases,
“the military departments have joint cooperation agreements to share the work product, and for
purposes of its work, VTS ultimately [was] directed by and answer[ed] to the Air Force.”
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exclusive jurisdiction to hear the dispute.2
Following the district court’s dismissal, VTS filed a bid protest action in the
COFC under 28 U.S.C. § 1491(b)(1), requesting declaratory and injunctive relief.
The COFC dismissed VTS’s complaint without prejudice, finding that 28 U.S.C.
§ 1500 precluded jurisdiction in the COFC while the time for appealing the district
court’s decision to the Eleventh Circuit was still pending.3 Vero Technical Support,
Inc. v. United States, 94 Fed. Cl. 784, 795-96 (2010). The present appeal followed.
VTS now contends that the district court erred in dismissing the action for lack of
subject matter jurisdiction because neither the Tucker Act nor the Contract Disputes
Act (“CDA”) expressly or impliedly forbids the relief sought by VTS in the district
court.
II. Standard of Review
We review de novo a district court’s order granting a motion to dismiss for lack
of subject matter jurisdiction and its interpretation and application of statutory
provisions. Chaney v. Tenn. Valley Auth., 264 F.3d 1325, 1326 (11th Cir. 2001);
2
The district court also discussed the COFC’s exercise of exclusive jurisdiction under the
CDA, 41 U.S.C. § 609(a)(1), but declined to make a finding that the CDA applied to the present
dispute.
3
The Southern District of Florida granted Appellees’ motion to dismiss on August 17,
2010. VTS filed its complaint in the COFC on August 24, 2010, and the COFC dismissed the
action on September 29, 2010. On October 15, 2010, VTS filed a Notice of Appeal in the
Southern District of Florida.
3
Mejia Rodriguez v. U.S. Dep’t of Homeland Sec., 562 F.3d 1137, 1142 (11th Cir.
2009).
III. Discussion
The Administrative Procedure Act (“APA”) waives the sovereign immunity of
the United States to the extent that it permits “[a] person suffering legal wrong
because of agency action” to “seek[ ] relief other than money damages” in federal
court. 5 U.S.C. § 702. The Act provides that a reviewing court shall, among other
things, “hold unlawful and set aside agency action, findings, and conclusions found
to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with the law.” Id. § 706(2)(A). However, the Act also provides:
Nothing herein (1) affects other limitations on judicial review or the
power or duty of the court to dismiss any action or deny relief on any
other appropriate legal or equitable ground; or (2) confers authority to
grant relief if any other statute that grants consent to suit expressly or
impliedly forbids the relief which is sought.
Id. § 702. Because both the Tucker Act and the CDA vest jurisdiction over certain
disputes exclusively with the COFC, these statutes forbid relief that would otherwise
be available under the APA, mainly the ability to resolve an APA claim that falls
within the scope of the Tucker Act or the CDA in a federal district court.
Accordingly, we must determine whether the allegations set forth in the complaint fall
within the scope of either the Tucker Act or the CDA.
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A. The Tucker Act
The Administrative Dispute Resolution Act (“ADRA”), which amended the
Tucker Act, “was enacted in 1996 in part to reorganize the jurisdiction of the federal
courts over bid protests cases and other challenges to government contracts. Prior to
the ADRA, the [COFC] and the federal district courts had enjoyed overlapping
jurisdiction to hear these claims.” Labat-Anderson, Inc. v. United States, 346 F.
Supp. 2d 145, 149 (D.D.C. 2004). The ADRA streamlined this jurisdictional
framework by creating “a transitional period during which the federal district courts
and the [COFC] would enjoy concurrent jurisdiction over government contract
cases.” Id. at 150. Specifically, the ADRA amendment to the Tucker Act provides:
Both the Unite[d] States Court of Federal Claims and the district courts
of the United States shall have jurisdiction to render judgment on an
action by an interested party objecting to a solicitation by a Federal
agency for bids or proposals for a proposed contract or to a proposed
award or the award of a contract or any alleged violation of statute or
regulation in connection with a procurement or a proposed procurement.
Both the United States Court of Federal Claims and the district courts
of the United States shall have jurisdiction to entertain such an action
without regard to whether suit is instituted before or after the contract
is awarded.
28 U.S.C. § 1491(b)(1). The ADRA amendment also contains a sunset provision
stating that the jurisdiction of the federal district courts over actions described in
§ 1491(b)(1) would expire on January 1, 2001, unless otherwise extended by
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Congress. Congress did not extend the deadline. As the Federal Circuit has
explained, “[i]t is clear that Congress’s intent in enacting the ADRA with the sunset
provision was to vest a single judicial tribunal with exclusive jurisdiction to review
government contract protest actions.” Emery Worldwide Airlines, Inc. v. United
States, 264 F.3d 1071, 1079 (Fed. Cir. 2001). Accordingly, the COFC now enjoys
exclusive jurisdiction over Tucker Act claims.
On appeal, VTS argues that its claims do not fall within the scope of Tucker
Act jurisdiction because the claims do not involve: (1) a violation of statute or
regulation (2) in connection with a procurement, alleged by (3) an interested party,
as required by § 1491(b)(1). We discuss each of VTS’s arguments in turn.
VTS first contends that § 1491(b)(1) does not apply to the present dispute
because the complaint does not allege a violation of a statute or regulation.
Specifically, VTS contends that although the complaint cites the statutes and
regulations pursuant to which the allegedly violated procedures were promulgated,
the complaint does not allege a violation of these statutes per se. Rather, VTS alleges
a violation of the Department of Defense’s (“DoD’s”) own procedures.
Notwithstanding VTS’s arguments to the contrary, the complaint specifically alleges
that “[Appellees’] insourcing decision is not in accordance with the insourcing
procedures required by 10 U.S.C. § 2463 which [Appellees] have bound themselves
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to.” Thus, the complaint alleges a violation of a statute or regulation.
VTS next argues that it does not seek to enjoin a “procurement” within the
meaning of § 1491(b). Section 1491(b) provides that the COFC shall have
jurisdiction over disputes relating to “any alleged violation of statute or regulation in
connection with a procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(1).
While the Tucker Act itself does not define the terms “procurement” or “proposed
procurement,” the Federal Circuit has adopted the definition of procurement provided
in 41 U.S.C. § 403(2). Distributed Solutions, Inc. v. United States, 539 F.3d 1340,
1345 (Fed. Cir. 2008). Section 403(2) provides that “‘procurement’ includes all
stages of the process of acquiring property or services, beginning with the process for
determining a need for property or services and ending with contract completion and
closeout.” 41 U.S.C. § 403(2). In light of this definition, the Federal Circuit has
determined that the phrase “in connection with a procurement or a proposed
procurement”
involves a connection with any stage of the federal contracting
acquisition process, including “the process for determining a need for
property or services.” To establish jurisdiction pursuant to this
definition, the contractors must demonstrate that the government at least
initiated a procurement, or initiated “the process for determining a need”
for acquisition and assistance solutions for [the project at issue].
Distributed Solutions, 539 F.3d at 1346.
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In the present case, VTS alleges that the Appellees’ decision to insource the
scope of the work previously performed by VTS was not rendered in accordance with
the procedures the DoD adopted pursuant to 10 U.S.C. § 2463. Because the decision
to insource a government contract involves the process of “determining a need for
property or services,” 41 U.S.C. § 403(2), that decision occurs “in connection with
a procurement or a proposed procurement” under the Tucker Act.4 28 U.S.C. §
1491(b)(1); see RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289
(Fed. Cir. 1999) (finding “[t]he operative phrase ‘in connection with’” to be “very
sweeping in scope,” and thus, “[a]s long as a statute has a connection to a
procurement proposal, an alleged violation suffices to supply jurisdiction”); Harris
Enters., Inc. v. U.S. Dep’t of Def., No. SA-10-CA-573-FB (W.D. Tex. Oct. 12, 2010)
(unpublished) (“While insourcing in and of itself may not involve the procurement
of goods or services, a decision whether or not to insource involves the process for
determining a need for acquisition of property or services and, consequently, involves
4
In support of its argument that the allegations in the present case do not involve a
“procurement,” VTS cites dicta from the COFC’s decision in Vero, 94 Fed. Cl. 784. In Vero, the
COFC stated that “plaintiff’s deliberate choice of forum in the District Court and chosen basis
for jurisdiction, traditional APA jurisdiction, resonates with this court. Without a contract or
solicitation at issue, even as amended by the ADRA, Tucker Act jurisdiction to challenge the
insourcing policy decision is not immediately apparent.” 94 Fed. Cl. at 792. However, VTS fails
to cite the next sentence in the opinion which provides: “[i]n this Order, however, the court does
not address the propriety of jurisdiction in the Court of Federal Claims, and has not fully
explored the issue at this time.” Id. Thus the COFC’s reflections on the application of Tucker
Act jurisdiction in Vero are not controlling in the present case.
8
a ‘procurement’ or a ‘proposed procurement’ regardless of whether property or
services are actually procured.” (citing Distributed Solutions, Inc., 539 F.3d at
1342)); Rothe Dev., Inc. v. U. S. Dep’t of Def., No. SA-10-CV-743-XR, 2010 WL
4595824, at *4 (W.D. Tex. Nov. 3, 2010) (“A decision to insource is a decision not
to acquire, not to enter a procurement process, and thus is necessarily a decision made
‘in connection with a procurement or proposed procurement’ as required under the
terms of the Tucker Act.”); but see K-Mar Indus., Inc. v. U.S. Dep’t of Def., 752 F.
Supp. 2d 1207, 1212 (W.D. Okla. 2010).
Finally, VTS argues that it is not an “interested party” within the meaning of
the Tucker Act because the predicate for “interested party” status is a contract award
process, which is necessarily absent from an insourcing process. The Federal Circuit
has applied to the Tucker Act the definition of “interested party” in the Competition
in Contracting Act, 31 U.S.C. § 3551-56: “an actual or prospective bidder or offeror
whose direct economic interest would be affected by the award of the contract or by
failure to award the contract.” 31 U.S.C. § 3551(2)(A); Am. Fed’n of Gov’t Emps.
v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001). Here, in an effort to establish
Article III standing, the complaint asserts that
[b]ut for their unlawful decision to insource VTS’s work, [Appellees]
would have to consider extending the option to VTS on the merits of
VTS’s current performance, or re-competing the contract.
9
The inability even to be considered for an option or even to compete for
the work as a consequence of the legal wrong are injuries in fact, i.e.
actual, concrete, and particularized injuries, to VTS.
Thus, the complaint expressly characterizes VTS as a prospective bidder with a direct
economic interest in the Appellees’ decision not to award a contract. Moreover, the
complaint asserts that VTS “is injured under its contract by not having an option
extended due to the insourcing.” In light of these allegations, VTS is an “interested
party” under the Tucker Act.
In sum, VTS is an interested party alleging that a federal agency violated a
“statute or regulation in connection with a procurement or a proposed procurement.”
28 U.S.C. § 1491(b). Accordingly, VTS’s challenge to the Appellees’ insourcing
decision falls within the scope of the Tucker Act and the exclusive jurisdiction of the
COFC.
B. The Contract Disputes Act
On appeal, the parties additionally dispute the proper application of the CDA
to the present action. The Contract Disputes Act “is a comprehensive scheme for the
resolution of ‘[a]ll claims by a contractor against the government relating to a
contract.’” Lockheed Martin Corp. v. Def. Contract Audit Agency, 397 F. Supp. 2d
659, 664 (D. Md. 2005) (quoting 41 U.S.C. § 605(a)). The Tucker Act, in
conjunction with the CDA “‘purports to make the [COFC] the exclusive trial court
10
for hearing disputes over government contracts that fall under the CDA.’” Tex.
Health Choice, L.C. v. Office of Personnel Mgmt., 400 F.3d 895, 899 (Fed. Cir. 2005)
(quoting Quality Tooling, Inc. v. United States, 47 F.3d 1569, 1572-73 (Fed. Cir.
1995)).
In the present case, the district court declined to decide whether the allegations
of the complaint fall within the scope of the CDA, leaving it to the COFC to
determine if its jurisdiction was properly exercised under the CDA. The Appellees
now argue that while the complaint presents typical CDA claims, this Court need not
determine whether the CDA applies to the present action because a procurement is
the source of the rights upon which VTS bases its claims and the relief sought is
available under the Tucker Act. In response, VTS argues that, having no contractual
rights to assert in the present matter, the allegations of the complaint relate solely to
the Appellees’ arbitrary insourcing decision.
The purpose of the CDA “is to ensure national uniformity in government
contract law,” Tex. Health, 400 F.3d at 899, a purpose that is furthered by permitting
the COFC to determine the scope of the CDA and its application to insourcing
challenges. Therefore, having affirmed the district court’s findings regarding the
Tucker Act, this Court need not reach the issue of whether the CDA also confers
exclusive jurisdiction over this case to the COFC.
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IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is AFFIRMED.
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