In the United States Court of Federal Claims
                                   No. 20-661C
                              (Filed October 5, 2020)
                             NOT FOR PUBLICATION

* * * * * * * * * * * * * * * * * *
                                  *
                                  *
PDS CONSULTANTS, INC.,            *
                                  *
                 Plaintiff,       *
                                  *
      v.                          *
                                  *
THE UNITED STATES,                *
                                  *
                 Defendant.       *
                                  *
                                  *
* * * * * * * * * * * * * * * * **


                                      ORDER

       For the reasons stated on the record during the September 14, 2020 status
conference, see ECF No. 28, the government’s motion to dismiss this case is
DENIED and its motion for judgment on the administrative record is GRANTED;
and the plaintiff ’s motion for judgment on the administrative record is DENIED.†
In brief, this matter was brought as a pre-award bid protest by plaintiff PDS
Consultants, Inc. (PDS), the incumbent contractor providing eyeglass fabrication
services for customers of the Department of Veterans Affairs (VA) care sites located
in the state of Ohio. Plaintiff challenges the decision to shift this work, upon the
expiration of its contract, to a VA Optical Lab located in Indianapolis.

       The government argued that the matter did not involve a procurement
decision within our jurisdiction, relying on cases in which federal agencies chose to
use resources or products which they already owned, such as AgustaWestland North
America, Inc. v. United States, 

, 1331 (Fed. Cir. 2018), and VFA, Inc.
v. United States, 

, 741–42 (2014). But the agency decisions in those
cases did not involve the consideration of goods or services available from the

† The Court also GRANTED the government’s motion to supplement the
administrative record. See ECF No. 28 at 21:2–7.
private sector, unlike Distributed Solutions, Inc. v. United States, 

,
1345–46 (Fed. Cir. 2008), and the various insourcing cases which our court has
decided, see, e.g., Mail Transportation, Inc. v. United States, 

, 415
(2017); Elmendorf Support Servs. JV v. United States, 

, 208 (2012).
An agency decision to cease procuring goods and services from private contractors
and to use instead its own employees and resources necessarily involves “the
process for determining a need for property or services” from the private sector,
Distributed 

(quoting what is now 41 U.S.C. § 111), and may
properly be challenged in a bid protest with “[a] non-frivolous allegation of a
statutory or regulatory violation in connection with” the decision

n.1.

        Here, PDS alleges that the decision of the VA to use the Optical Lab instead
of a private contractor is tantamount to the award of a contract, and must be
predicated by the “Rule of Two” analysis required by the Veterans Benefits, Health
Care, and Information Technology Act of 2006, 38 U.S.C. § 8127(d) (Veterans
Benefits Act). See Compl. ¶¶ 39–44. While not frivolous, this contention is
mistaken. The Veterans Benefits Act is not an outsourcing statute requiring the
use of contracts, but by its terms applies only when a VA contracting officer is
making a contract award. See 38 U.S.C. § 8127(d). The record, however, does not
show any involvement of a contracting officer or the use of a contract in the decision
to shift the work to the Optical Lab or in the expected implementation of that
decision. And the Court is not persuaded that the term “contracting
determinations,” employed by the Supreme Court in Kingdomware Technologies,
Inc. v. United States, 

, 1976 (2016), means anything broader than
decisions to award a contract to nonfederal sources of goods or services. While a
decision not to procure might be enough to implicate our jurisdiction over a bid
protest, a decision not to award any contract cannot implicate the Veterans Benefits
Act provision relied upon by PDS. Thus, the government is correct on the merits of
this protest.

      For these reasons, and as more fully explained on the record at the
September 14, 2020 status conference, the government’s motion to dismiss the case
is DENIED, the plaintiff ’s motion for judgment is DENIED, and the government’s
motion for judgment is GRANTED. The Clerk shall enter judgment accordingly.


IT IS SO ORDERED.

                                       s/ Victor J. Wolski
                                       VICTOR J. WOLSKI
                                       Senior Judge




                                         -2-