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Vero Technical Support, Inc. v. USDOD, 10-14889 (2011)

Court: Court of Appeals for the Eleventh Circuit Number: 10-14889 Visitors: 81
Filed: Aug. 10, 2011
Latest Update: Feb. 22, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED _ U.S. COURT OF APPEALS ELEVENTH CIRCUIT No. 10-14889 AUG 10, 2011 _ JOHN LEY CLERK D.C.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
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                                                                     [DO NOT PUBLISH]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.”

                                              2
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.

                                           4
                                 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



                                           5
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

                                          6
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
.



                                           7
       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.

                                           11
                       IV. CONCLUSION

For the foregoing reasons, the judgment of the district court is AFFIRMED.




                                12

Source:  CourtListener

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