McTech Corporation v. United States

In the United States Court of Federal Claims
No. 12-122C
(Filed: February 19, 2013)
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) Pre-award bid protest; series of
McTECH CORPORATION, ) incremental corrective actions; cumulative
) effect of actions; mootness
Plaintiff, )
)
v. )
)
UNITED STATES, )
)
Defendant. )
)
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Hilary S. Cairnie, Baker Hostetler LLP, Washington, D.C., for plaintiff. With him at the
hearings were Christopher Noon, Trevor Stanley, and Udyogi Hangawatte, Baker Hostetler LLP,
Washington, D.C.
Kenneth S. Kessler, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, D.C., for defendant. With him on the brief
were Stuart F. Delery, Principal Assistant Attorney General, Civil Division, and Jeanne E.
Davidson, Director, and Kenneth M. Dintzer, Assistant Director, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, D.C.
OPINION AND ORDER
LETTOW, Judge.
In this pre-award bid protest, the government has taken a series of incremental steps over
a period of months to address the grounds of the protest by plaintiff, McTech Corporation. The
question presented is whether those steps, considered cumulatively, have the effect of redressing
McTech’s claims such that McTech’s action is moot.
McTech filed its protest after it had been eliminated from competition for a contract to
construct a conference center and dormitories for the Customs and Border Protection’s Advanced
Training Center in Harpers Ferry, West Virginia. McTech had been an incumbent contractor for
other work at the Training Center, but it had not been involved with the design of the new
buildings. After having submitted a bid on the new work, McTech was disqualified by the
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contracting officer on the ground that it had a relationship with an entity involved in the design
of the project. McTech challenged its elimination in a protest to the Government Accountability
Office (“GAO”) but did not prevail, and subsequently filed suit in this court.
During the course of this litigation, the government slowly, on a step-by-step basis,
reversed its elimination of McTech from the procurement process and took actions to reconfigure
that process. At an earlier mid-point in this litigation, the government had taken a measure of
corrective action by eliding McTech’s disqualification, and it then moved to dismiss the action
on the mootness grounds. The court denied the government’s motion on the ground that the
corrective action taken at that point had not eliminated the possibility of meaningful relief.
McTech Corp. v. United States, 105 Fed. Cl. 726 (2012). A “whistleblower” letter then triggered
additional review and further actions by the government. Subsequently, after a hearing, the court
provided McTech with a measure of injunctive relief by granting a temporary restraining order
that prevented the government from cancelling the original solicitation and resoliciting the
procurement until the government explained why transferring decisionmaking to a different
office of the United States Army Corps of Engineers (“the Corps”), which oversaw the
procurement, would not be sufficient. See Order of November 8, 2012, ECF No. 89. The
explanation was submitted and the further corrective action was described in some detail. See
Def.’s Notice of Filing Affs. (“Def.’s Notice”) (Nov. 19, 2012), ECF No. 94. Although the
government’s actions have been both tortuous and torpid, and occurred on an incremental basis
only when driven by necessity or the threat of an adverse result, the sum of the actions has
provided McTech with the relief it sought and removed any prejudice McTech may have
suffered. Consequently, dismissal on grounds of mootness is appropriate.
BACKGROUND
McTech is a construction company incorporated in Ohio, maintaining its primary place of
business in Cleveland, Ohio. Am. Compl. ¶¶ 1-2. The solicitation at issue was being conducted
by the Corps through its Fort Worth District Office on behalf of the Department of Homeland
Security, Customs and Border Protection. See Am. Compl. ¶¶ 3-4. Request for Proposal No.
W9126G-11-0128 (“the Solicitation”) was issued on August 29, 2011. Id. It solicited offers for
the construction of a conference center and dormitory at Customs and Border Protection’s
Advanced Training Center in Harpers Ferry, West Virginia. McTech, 105 Fed. Cl. at 727-28.
McTech timely submitted an offer in response to the Solicitation. Am. Compl. ¶ 6.
Prior to any award, McTech was notified that the Corps had become concerned about a
potential conflict of interest regarding McTech’s relationship with another entity, BrooAlexa
Design Joint Venture, LLC, which was involved in the design of the Harpers Ferry project. Am.
Compl. ¶¶ 7, 31-40. This concern was reportedly prompted by an anonymous phone call to the
contract specialist assigned to the solicitation. See McTech, 105 Fed. Cl at 728. McTech
responded to the notice by denying the existence of any conflict and providing the Corps with
additional documentation as requested. Id. Nonetheless, the Corps’ contracting officer
concluded that either an actual or potential conflict existed and disqualified McTech from the
competition for the award. Id.
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After McTech failed to obtain relief in a pre-award bid protest to GAO,1 it filed the
present action in this court. McTech sought relief in the form of a permanent injunction against
the Corps, prohibiting any award under the Solicitation until McTech had been reinstated and the
Corps had conducted a proper conflict analysis of all offerors participating in the acquisition.
Am. Compl. ¶ 123.
The Corps’ incremental steps to provide elements of corrective relief have occurred over
a seven-month period. On April 24, 2012, the government filed a notice of corrective action,
stating that it intended to withdraw its letters disqualifying McTech from the competition for an
award and to reinstate McTech to the pool of eligible bidders. Def.’s Notice of Corrective
Action, ECF No. 31. On May 4, 2012, the Corps wrote to all offerors, inquiring about their
relationships with BrooAlexa LLC, BrooAlexa Design Joint Venture LLC and Perspectus
Architecture, but it failed to ask about relationships with any of the other six entities that were
also identified as working on the design or providing cost estimates for the construction project.
See Am. Compl., Attach. 9. On May 31, 2012, the Corps amended the Solicitation and
reassigned administrative and contract duties to officials in the Fort Worth District Office other
than those who had originally disqualified McTech. See Am. Compl., Attach. 10. On June 1,
2012, McTech amended its complaint in light of these measures. In the amended complaint,
McTech requested equitable relief in the form of a new “source selection authority,” direction for
the Corps to perform a proper conflict analysis of the offerors, a determination that McTech had
and has no conflict related to BrooAlexa Design Joint Venture LLC, reinstatement of McTech in
the competition, and a permanent injunction prohibiting the Corps from using the Fort Worth
District Office on this procurement. Am. Compl. ¶ 123.
In August 2012, the court received an ex parte “whistleblower” letter. This letter was
disclosed to the parties at a hearing held on August 22, 2012. The letter contained detailed
allegations that particular members of the Fort Worth District Office had taken improper actions
in managing the Solicitation. Hr’g Tr. (sealed) (Aug. 22, 2012). The letter raised the specter of
bias against McTech on the part of certain (if not all) members of the Corps’ procurement
officials in the Fort Worth District Office. Id. In September, partially responding to these
allegations, the Corps replaced all key procurement personnel associated with the Solicitation,
concluded its investigation of McTech, and declared McTech eligible to compete for the award.
See Def.’s Resp. in Opp’n to Pl.’s Mot. to Compel Produc. of the Admin. Record (Sept. 28,
2012), ECF No. 72, at 2-3.
On November 10, 2012, the Corps notified the court of a final spate of corrective action,
adopting a plan mandating cancellation of Solicitation No. W9126G-11-R-0128 and transferring
management of the procurement to the Corps’ Baltimore District. See Def.’s Notice at 2. This
corrective action plan specified that offerors that received favorable conflict outcomes from the
Fort Worth District Office (McTech ultimately being one) would not be required to undergo a
new conflict analysis. Id. In this plan, the government noted that fresh proposals would have to
be submitted by offerors in response to the new solicitation because all proposals for the original
solicitation had expired. Id. at 3. At a hearing held in November 2012, the government
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The court has before it allegations that a governmental official was not entirely truthful
in testimony at a hearing conducted by GAO prior to that agency’s decision. Those allegations
are beyond the court’s juridical power to address and have been referred to appropriate officials.
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represented that the project specifications would remain substantially similar to those of the
original solicitation. Hr’g Tr. 3:8 to 4:4 (Nov. 8, 2012).
On November 21, 2012, the court issued an order for McTech to show cause why this
case should not be dismissed due to mootness. Briefing under this order was completed on
January 30, 2013, and the matter has been readied for disposition.
ANALYSIS
“[A] case is moot when the issues presented are no longer ‘live’ or the parties lack a
legally cognizable interest in the outcome.” Powell v. McCormack, 395 U.S. 486, 496 (1969)
(citations omitted). This is not to say, however, that an erring party may escape liability simply
by halting its behavior during the pendency of litigation, only to resume it once the case has been
dismissed. See United States v. W. T. Grant Co., 345 U.S. 629, 632 (1953) (“[V]oluntary
cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and
determine the case, i.e., does not make the case moot.”). To avoid this possibility, the Supreme
Court explicated two criteria to be used in determining whether voluntary cessation suffices to
dissolve jurisdiction through mootness: a case is moot if “(1) it can be said with assurance that
there is no reasonable expectation . . . that the alleged violation will recur, and (2) interim relief
or events have completely and irrevocably eradicated the effects of the alleged violation.” Los
Angeles Cnty. v. Davis, 440 U.S. 625, 631 (1979) (internal citations omitted).
A. Any Reasonable Expectation of Recurrence
McTech asserts that it can reasonably expect recurrence of the same prejudice it
experienced during the original solicitation because the cancellation “is not a clean break.” Pl.’s
Resp. to Order to Show Cause (“Pl.’s Resp.”) (Dec. 10, 2012) at 7, ECF No. 98. McTech asserts
that the only circumstance under which it will receive fair treatment by the Corps is if a “true
firewall” is erected between the Fort Worth District Office and the new procurement district. Id.Such a firewall, McTech says, cannot possibly exist while the Baltimore District Office is
permitted to incorporate information, such as the conflict analysis, prepared by the Fort Worth
District Office. Id. This contention assumes that the Corps’ officials stationed in Baltimore are
susceptible to improper influence from Fort Worth by reading reports prepared by Fort Worth
officials.2
The court presumes good faith on the part of the procurement officers at the Corps’
Baltimore District Office, absent proof to the contrary. See T&M Distribs., Inc. v. United States,
185 F.3d 1279, 1285 (Fed. Cir. 1999) (“[G]overnment officials are presumed to act in good faith,
and ‘it requires . . . proof to induce a court to abandon the presumption of good faith.’” (quoting
Kalvar Corp. v. United States, 211 Ct. Cl. 192, 198 (1976))). While that presumption may have
been shaken by the whistleblower letter related to the actions of the Fort Worth District Office,
nothing indicates that officials of the Baltimore District Office have been tainted in the same
way. See Chapman Law Firm Co. v. Greenleaf Constr. Co., 490 F.3d 934, 940 (Fed. Cir. 2007)
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The documentation proposed to be shared between the Fort Worth and Baltimore
District Offices will ensure precisely what McTech seeks, namely, an affirmative declaration that
it has no conflict and need not be subjected to a further round of proceedings in that regard.
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(holding that, if corrective action is reasonable, the court is “required to assume that the
[g]overnment [will] carry out the corrective action in good faith.”). Given the removal of
authority from the Fort Worth District Office, it is not now reasonable to assume that officials at
the Baltimore District Office will have similar biases.
B. Eradication of Effects
McTech submits that its requests for relief have not been fully satisfied by the Corps’
remedial measures. It has proposed further elements, including a prohibition against any further
conflict analysis, “the relief of a final award and selection decision,” and “not having to prepare
another bid proposal.” Pl.’s Resp. at 3. In doing so, McTech sidesteps the thrust of the doctrine
of mootness. The relevant question for the court is not whether every request made by McTech
has been met; rather, the question is whether the offending party has successfully eradicated the
effects of the violation itself. In this vein, the government contends that “the Corp’s Corrective
Action Plan reasonably ensures that the harms and violations alleged by McTech will not recur
and have been irrevocably eradiated.” Def.’s Resp. to McTech Corp.’s Resp. to the Court’s . . .
Order to Show Cause Why This Case Should Not Be Dismissed As Moot (Jan. 30, 2013) at 10,
ECF No. 105 (heading) (some capitals omitted). This contention has merit.
What McTech proposes by way of further relief is either already encompassed within the
Corps’ corrective action (the bar on further conflict analysis), beyond the court’s power to grant
(a final selection decision and award), or within the Corps’ discretion (requiring preparation of
fresh bid proposals). In sum, further remedial relief is not available in this pre-award bid protest.
“The case has therefore lost its character as a present, live controversy of the kind that must exist
if we are to avoid advisory opinions on abstract questions of law.” Hall v. Beals, 396 U.S. 45, 48
(1969) (reflecting the effect of an amendment by the Colorado legislature to establish a two-
month residency requirement for voting rather than a six-month residency requirement, and that
“nothing in the Colorado legislative scheme as now written adversely affects either [the
complaining parties’] present interests or their interests at the time this litigation was
commenced”); see also Princeton University v. Schmid, 455 U.S. 100, 103 (1982) (taking into
account a change in University regulations from those challenged, which had required members
of the public who wished to distribute materials on campus to receive permission from
University officials).
CONCLUSION
Because the voluntary remedial measures taken by the government have sufficiently
mitigated the effects of its prior errant actions, the case is now moot and must be DISMISSED.
The clerk shall enter judgment in accord with this decision.
No costs.
It is so ORDERED.
s/ Charles F. Lettow
Charles F. Lettow
Judge
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