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Pernix Group, Inc. v. United States, 15-420 (2015)

Court: United States Court of Federal Claims Number: 15-420 Visitors: 11
Judges: Lynn J. Bush
Filed: Jun. 10, 2015
Latest Update: Mar. 02, 2020
Summary: In the United States Court of Federal Claims No. 15-420 C (June 10, 2015)1 * * * * * * * * * * * * * * * * PERNIX GROUP, INC. * * Plaintiff, * * FRAMACO INTERNATIONAL, * INC., * * Intervenor-plaintiff, * Bid Protest; Justiciability; Protest * Is Not Ripe Where the Agency v. * Has Yet to Take a Final Action * Adverse to the Protestor. THE UNITED STATES, * * Defendant, * * CADDELL CONSTRUCTION * COMPANY, * * Intervenor-defendant. * * * * * * * * * * * * * * * * * J. Randolph MacPherson, Washington
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              In the United States Court of Federal Claims
                                          No. 15-420 C
                                        (June 10, 2015)1

 * * * * * * * * * * * * * * * *
 PERNIX GROUP, INC.                *
                                   *
              Plaintiff,           *
                                   *
 FRAMACO INTERNATIONAL,            *
 INC.,                             *
                                   *
             Intervenor-plaintiff, *                Bid Protest; Justiciability; Protest
                                   *                Is Not Ripe Where the Agency
          v.                       *                Has Yet to Take a Final Action
                                   *                Adverse to the Protestor.
 THE UNITED STATES,                *
                                   *
              Defendant,           *
                                   *
 CADDELL CONSTRUCTION              *
 COMPANY,                          *
                                   *
             Intervenor-defendant. *
 * * * * * * * * * * * * * * * *

     J. Randolph MacPherson, Washington, DC, for plaintiff. Rebecca Bailey
Jacobsen, Washington, DC, of counsel.

     Jonathan D. Shaffer, Tysons Corner, VA, for intervenor-plaintiff. Mark E.
Hanson and Mary Pat Buckenmeyer, Tysons Corner, VA, of counsel.

       1
         / This opinion was issued under seal on May 29, 2015. Pursuant to ¶ 5 of the ordering
language, the parties were invited to identify source selection, proprietary or confidential material
subject to deletion on the basis that the material was protected/privileged. No redactions were
proposed by the parties. Thus, the sealed and public versions of this opinion are identical, except
for the publication date and this footnote.
      Sosun Bae, United States Department of Justice, with whom were Benjamin
C. Mizer, Principal Deputy Assistant Attorney General, Robert E. Kirschman, Jr.,
Director, Deborah A. Bynum, Assistant Director, Washington, DC, for defendant.

      Dirk Haire, Washington, DC, for intervenor-defendant. Alexa Santora,
Sonia Tabriz, P. Sean Milani-Nia, Washington, DC, of counsel.

                             __________________________

                               OPINION AND ORDER
                             __________________________

Bush, Senior Judge.

      This bid protest is before the court on defendant’s and intervenor-
defendant’s motions to dismiss brought under Rule 12(b)(1) of the Rules of the
United States Court of Federal Claims (RCFC). These motions have been fully
briefed. For the reasons stated below, defendant’s and intervenor-defendant’s
motions to dismiss are granted.

                                     BACKGROUND2

I.     Introduction

       Plaintiff Pernix Group, Inc. (Pernix) filed its bid protest on April 27, 2015.
The protest seeks declaratory and injunctive relief regarding the proper
interpretation of 22 U.S.C. § 4852(c)(2)(E) (2012) in four procurements currently
underway under the aegis of the United States Department of State (State).
According to the complaint, the Government Accountability Office (GAO)
recently issued a decision advising State to interpret § 4852 in a manner that
would eliminate Pernix from consideration in these procurements. The primary
question before the court is whether this protest is ripe, given that State has not yet
acted, and has not indicated how it will act, in response to GAO’s decision.

       2
         / The facts upon which the parties rely are undisputed. The court makes no findings of
fact in this opinion other than to determine whether plaintiff’s claims are justiciable.

                                               2
       Caddell Construction Company (Caddell) has intervened in this protest as
an intervenor-defendant and Framaco International, Inc. (Framaco) has intervened
as an intervenor-plaintiff. State’s official response to the GAO decision is not due
until June 19, 2015. The government has agreed to stay award in the procurement
which was the focus of the GAO protest through June 12, 2015. The court
determined that oral argument on the ripeness issue was unnecessary.

II.   GAO and this Court Have Disagreed on the Law Governing Embassy
      Construction Projects

      A.     The Governing Statute

       State procurements for embassy construction are subject to 22 U.S.C.
§ 4852 (2012), titled “Diplomatic construction program.” Where adequate
competition exists, contractors must be either “United States persons” or
“qualified United States joint venture persons” in order to be eligible for such
construction contracts. 
Id. § 4852(a).
Only the statutory definition of “United
States person” is relevant to this bid protest.

      More specifically, only one element or requirement of the definition of
“United States person” is at issue here:

             (2) the term “United States person” means a person
             which –
             ....
                    (E) with respect to a construction project under
                    subsection (a)(1) of this section, has achieved total
                    business volume equal to or greater than the value
                    of the project being bid in 3 years of the 5-year
                    period before the date [of the issuance of the
                    solicitation.]

22 U.S.C. § 4852(c)(2). Thus, under the plain meaning of the statutory terms, a
minimum business volume threshold is established which screens out ineligible
contractors. Since 2007, however, GAO and this court have diverged as to the
proper formula to employ in determining the “total business volume” minimum
threshold.

                                          3
      B.    GAO’s Interpretation of the Total Business Volume Requirement

        In March of 2007 Caddell filed a protest at GAO concerning the award of an
embassy construction contract. Caddell Constr. Co., B-298949.2, 2007 CPD
¶ 119, 
2007 WL 1893209
, at *3 (Comp. Gen. June 15, 2007) (“Caddell I”). In that
protest, Caddell challenged State’s “approach of adding together 3 years of a
company’s business receipts” to determine the total business volume of an offeror.
Id. at *8.
In essence, State’s interpretation of the phrase “total business volume
equal to or greater than the value of the project being bid in 3 years of the 5-year
period before the date [of the issuance of the solicitation],” 22 U.S.C.
§ 4852(c)(2)(E), allowed a company to meet the minimum threshold by
aggregating three years of business receipts. Caddell I, 
2007 WL 1893209
, at *8.
This approach can be described as a “cumulative” total business volume formula.

     GAO agreed with Caddell that State’s cumulative total business volume
formula was not correct and opined:

            We think the ordinary and common meaning of these
            words is that eligible offerors will have achieved a
            business volume equal to or greater than the value of the
            project in each of 3 years within the 5-year period.

Id. at *9
(emphasis added). Thus, GAO adopted an interpretation of total business
volume that requires that the minimum threshold be met annually for three
individual years, not cumulatively through aggregation. GAO’s formula can
therefore be described as an “annual” total business volume formula. After giving
consideration to other means of statutory interpretation beyond an analysis of the
plain text, GAO concluded:

            [W]e think the agency’s interpretation of this provision –
            looking to an entity’s highest cumulative 3-year business
            volume within the previous 5-year period – conflicts
            with the [legislative history]. In short, we find that
            [State’s] interpretation of this statute is inconsistent with
            its ordinarily understood meaning, and with the
            legislative concerns that led to the statute’s enactment.



                                          4

Id. at *10.
      C.      The United States Court of Federal Claims Disagrees with GAO
              and Adopts the Cumulative Total Business Volume Formula

       Another bid protest filed later that year with this court raised the same issue,
i.e., whether the total business volume threshold must be met annually, or
cumulatively, in three of the five years before the issuance of the solicitation.
Grunley Walsh Int’l, LLC v. United States, 
78 Fed. Cl. 35
(2007). There, the
protestor had been adversely affected by State’s decision to follow Caddell I and
to adopt an annual total business volume threshold interpretation of
§ 4852(c)(2)(E). Grunley 
Walsh, 78 Fed. Cl. at 38
. The court observed that for
pure questions of law this court accords no deference to GAO opinions, and noted
that GAO decisions are not binding on this court. 
Id. at 39
(citations omitted).

      Like GAO, this court began its analysis with the plain text of the statute.
Unlike GAO, the court reached this conclusion:

              The word “total” before the term “business volume”
              indicates that the requirement is met by adding three out
              of the past five years to equal the offeror’s “total
              business volume.” If the section is read without the
              word “total,” it is completely unclear whether the three
              years are to [be] measured individually or cumulatively.
              The inclusion of the word “total” modifies the term
              “volume” and informs the reader that the volume in
              question will be, as plaintiff states, “a product of
              addition.” Measuring the three years cumulatively gives
              meaning to the word “total” and avoids a construction
              that leaves language “superfluous, void, or
              insignificant.”

Id. at 40
(quoting Duncan v. Walker, 
533 U.S. 167
, 174 (2001)) (footnote
omitted). After reviewing other potential aids to statutory construction, the court
held that the “total business volume requirement is cumulative” and sustained the
protest. 
Id. at 43.


                                           5
       D.    GAO Comments in 2009 that the Annual Total Business Volume
             Formula in Caddell I, Not the Cumulative Total Business Volume
             Formula in Grunley Walsh, is Correct

       In 2009, GAO was confronted again with the total business volume question
in another State Department embassy construction project protest. Caddell
Constr. Co., B-401596, 2009 CPD ¶ 187, 
2009 WL 3031273
(Comp. Gen. Sept.
21, 2009) (“Caddell II”). In that protest, which also involved two of the three
offerors participating in this protest, Caddell, relying on Caddell I, suggested that
Framaco should have been eliminated from the competition because, among other
reasons, it did not meet the annual total business volume requirement (as opposed
to the cumulative total business volume requirement). 
Id. at *3.
GAO did not
base its decision in Caddell II on Framaco’s failure to meet the annual total
business volume requirement, but relied instead on other defects in Framaco’s
qualifications. 
Id. at *4.
       State argued before GAO that it was following Grunley Walsh and applying
the cumulative total business volume requirement, not the annual total business
volume requirement applied by GAO in Caddell I. Caddell II, 
2009 WL 3031273
,
at *4. GAO observed that State “recognizes that our Office reached a different
conclusion about the meaning of this statute, [but] it urges our Office to follow the
court’s interpretation” of § 4852(c)(2)(E) in Grunley Walsh. 
Id. GAO disagreed
with this suggestion:

             Then and now, we think the ordinary and common
             meaning of the words in this statute is that eligible
             offerors will have achieved a business volume equal to
             or greater than the value of the project in each of 3 years
             within the 5-year period.

Id. (citing Caddell
I) (emphasis added). Nonetheless, avoiding direct conflict with
this court’s interpretation of § 4852(c)(2)(E), GAO did not address State’s
application of a cumulative total business volume requirement; instead, GAO
sustained Caddell’s protest on other grounds. 
Id. III. Protests
of the Current Embassy Construction Procurement in Each
       Forum

                                          6
       A.      In 2014, Pernix and Framaco Satisfy the Cumulative Total
               Business Volume Formula and Are Prequalified for an Embassy
               Construction Contract Procurement

       Pernix and Framaco were recently judged by State to have satisfied the
cumulative total business volume requirement in a competition for embassy
construction in Maputo, Mozambique (the Maputo procurement). Compl. ¶¶ 14-
15; Framaco Resp. at 4. As a result, they, along with Caddell and other offerors,
were invited to participate in Phase II of the Maputo procurement. Compl. ¶ 17;
Framaco Resp. at 5. In other words, these offerors had achieved “prequalification”
for the Maputo procurement. The Prequalification Notice listing the companies
selected to continue in the procurement was published on April 4, 2014. Compl.
¶ 17.

       B.      Caddell Protests the Prequalification of Pernix and Framaco at
               GAO

       Before Phase II proposals were submitted by the offerors in the Maputo
procurement, Caddell filed a protest at GAO arguing that Pernix and Framaco
should not have been prequalified, relying on the annual total business volume
requirement articulated in Caddell I for one of its protest grounds. Caddell
Constr. Co., B-411005.1, B-411005.2, 2015 CPD ¶ 132, 
2015 WL 1874239
(Comp. Gen. Apr. 20, 2015) (Caddell III). In its decision on that protest GAO
noted the conflict between the Court of Federal Claims and GAO in interpreting
the “total business volume” term of § 4852(c)(2)(E). Caddell III, 
2015 WL 1874239
, at *10. As in 2009, GAO found “no basis to revise our prior
interpretation of the [law].” 
Id. The reasons
why GAO continues to interpret § 4852(c)(2)(E) differently
than this court in Grunley Walsh are irrelevant to the current motions under
review.3 By following Caddell I, GAO sustained Caddell’s challenge to

       3
         / This court, were it to reach the merits of Pernix’s protest, would be bound by neither
Grunley Walsh nor Caddell III. Decisions in other cases before this court are not binding in this
proceeding. See W. Coast Gen. Corp. v. Dalton, 
39 F.3d 312
, 315 (Fed. Cir. 1994) (“Court of
Federal Claims decisions, while persuasive, do not set binding precedent for separate and distinct
cases in that court.”) (citations omitted). Nor do GAO decisions create binding precedent for this
                                                                                      (continued...)

                                                 7
Framaco’s prequalification, in part, because Framaco never achieved an annual
total business volume of $160 million (the value of the Maputo construction
project) although Framaco satisfied the cumulative total business volume formula.
Caddell III, 
2015 WL 1874239
, at *13. GAO also sustained Caddell’s challenge
to Pernix’s prequalification, for the sole reason that Pernix’s annual total business
volume never reached $160 million, although Pernix, like Framaco, satisfied the
cumulative total business volume formula. 
Id. at *14-16.
The GAO decision
issued on April 20, 2015.

       C.     Pernix Files a Protest in this Court Concerning the Maputo
              Procurement and Three Others

       One week after GAO issued Caddell III, Pernix filed its bid protest in this
court. Although State has taken no action in response to Caddell III, and has not
publicly reacted to Caddell III, Pernix seeks an injunction and declaratory relief to
forestall any action by State that would harm its competitive interests. Should
State choose to follow the recommendation of GAO in Caddell III, Pernix would
be excluded from the Maputo procurement – thus, Pernix seeks an injunction to
preclude this occurrence. Compl. Count II, IV. Should State choose to follow the
recommendation of GAO in Caddell III, Pernix would also lose any chance of
winning contracts for State Department construction projects in three other
locations: Matamoros, Mexico; Port Moresby, Papau New Guinea; and, Niamey,
Niger. 
Id. Count III-IV.
Pernix seeks an injunction preventing those occurrences
as well. 
Id. Lastly, Pernix
seeks declaratory relief regarding the proper
interpretation of § 4852(c)(2)(E). 
Id. Count I.
       D.     Motions to Dismiss

       Defendant and Caddell both argue that Pernix’s claims are not ripe, because
State has not yet taken any action to revoke Pernix’s prequalification for the
Maputo procurement. The government presents two additional arguments.
According to one theory, Pernix lacks standing to bring this protest because it has

       3
         (...continued)
court. See, e.g., Allied Tech. Grp., Inc. v. United States, 
649 F.3d 1320
, 1331 n.1 (Fed. Cir.
2011) (stating that GAO decisions do not create binding precedent for the United States Court of
Appeals for the Federal Circuit); XTRA Lease, Inc. v. United States, 
50 Fed. Cl. 612
, 618 (2001)
(stating that “GAO decisions are not binding on this court”) (citation omitted).

                                               8
not been prejudiced by any error committed by State. Def.’s Mot. at 7-8.
According to another theory, even if Pernix’s protest of the Maputo procurement
is deemed to be justiciable, Pernix should not be allowed to include the three other
procurements in its protest. For this reason, the government argues that any of
plaintiff’s claims related to procurements for construction in Matamoros, Port
Moresby, and Niamey should be dismissed. 
Id. at 8.
The court reserves further
discussion of these legal theories for the analysis section of this opinion.

                                   DISCUSSION

I.    Standard of Review for a Ripeness Challenge to a Bid Protest

       Ripeness is a justiciability doctrine. See Fisher v. United States, 
402 F.3d 1167
, 1176 (Fed. Cir. 2005) (“Though justiciability has no precise definition or
scope, doctrines of standing, mootness, ripeness and political question are within
its ambit.”) (citations omitted). A 2009 decision of this court provided a succinct
description of the ripeness doctrine and applied that doctrine to a bid protest in
this court:

                    The justiciability doctrine of ripeness
             circumscribes the court’s review to cases that present
             realized rather than anticipated or hypothetical injuries.
             United Public Workers of America v. Mitchell, 
330 U.S. 75
, 89-90, 
67 S. Ct. 556
, 
91 L. Ed. 754
(1947). A claim
             for relief is not ripe for adjudication when it rests upon
             “contingent future events that may not occur as
             anticipated, or indeed may not occur at all.” Thomas v.
             Union Carbide, 
473 U.S. 568
, 581, 
105 S. Ct. 3325
, 
87 L. Ed. 2d 409
(1985). When reviewing an administrative
             action, the court evaluates two factors: (1) “the fitness of
             the issues for judicial decision,” and (2) “the hardship to
             the parties of withholding court consideration.” Abbott
             Labs. v. Gardner, 
387 U.S. 136
, 149, 
87 S. Ct. 1507
, 
18 L. Ed. 2d 681
(1967), overruled on other grounds by
             Califano v. Sanders, 
430 U.S. 99
, 
97 S. Ct. 980
, 51 L.
             Ed. 2d 192 (1977). A challenge to an administrative
             action must satisfy both factors, under Abbott

                                          9
               Laboratories, in order to be ripe for judicial review.
               Cedars-Sinai Medical Ctr. v. Watkins, 
11 F.3d 1573
,
               1581 (Fed. Cir. 1993). Under the first factor, “an agency
               decision is not ripe for judicial review until the allegedly
               offending agency has adopted a final decision.” NSK,
               Ltd. v. United States, 
510 F.3d 1375
, 1384 (Fed. Cir.
               2007) (emphasis added). In turn, an agency’s decision is
               final, for the purposes of ripeness, only if it (1) “marks
               ‘the consummation of the agency’s decision-making
               process,’ i.e., it must not be merely tentative or
               interlocutory, and (2) ‘the action [is] one by which rights
               or obligations have been determined, or from which legal
               consequences will flow.’” 
Id. at 1385
(quoting Bennett
               v. Spear, 
520 U.S. 154
, 177, 
117 S. Ct. 1154
, 
137 L. Ed. 2d
281 (1997)).

Madison Servs., Inc. v. United States, 
90 Fed. Cl. 673
, 678 (2009).

       The basic analytical framework presented in Madison Services is the same
as the ripeness framework recently discussed by the United States Court of
Appeals for the Federal Circuit.4 The Federal Circuit decision most on point,
because of its articulation of a ripeness standard applicable to bid protests in this
court, is Systems Application & Technologies, Inc. v. United States, 
691 F.3d 1374
(Fed. Cir. 2012) (SA-TECH). This precedential statement of the ripeness doctrine
is very similar to the discussion of the doctrine presented in Madison Services:


       4
         / Because Madison Services cleaves to binding precedent of the Federal Circuit, the
court finds the ripeness analysis in Madison Services to be far more persuasive than the ripeness
analysis in CBY Design Builders v. United States, 
105 Fed. Cl. 303
(2012), a case relied upon by
both Pernix and Framaco. The CBY Design opinion doubted whether some of the cases relied
upon in Madison Services, such as Bennett v. Spear, 
520 U.S. 154
(1997), Tokyo Kikai
Seisakusho, Ltd. v. United States, 
529 F.3d 1352
(Fed. Cir. 2008), and U.S. Ass’n of Imps. of
Textiles & Apparel v. U.S. Dep’t of Commerce, 
413 F.3d 1344
(Fed. Cir. 2005), had “much, if
any relevance to the question of whether a bid protest is 
ripe.” 105 Fed. Cl. at 332
. Yet these
opinions, cited approvingly in Madison Services and questioned as potentially irrelevant in CBY
Design, provide the foundational law for the Federal Circuit’s subsequent application of the
ripeness doctrine to a bid protest. Sys. Application & Techs., Inc. v. United States, 
691 F.3d 1374
, 1384 (Fed. Cir. 2012).

                                               10
            A claim is not ripe for judicial review when it is
            contingent upon future events that may or may not occur.
            Thomas v. Union Carbide Agric. Prods. Co., 
473 U.S. 568
, 580-81, 
105 S. Ct. 3325
, 
87 L. Ed. 2d 409
(1985).
            The purpose of the doctrine is to prevent the courts,
            “through avoidance of premature adjudication, from
            entangling themselves in abstract disagreements over
            administrative policies, and also to protect the agencies
            from judicial interference until an administrative
            decision has been formalized and its effects felt in a
            concrete way by the challenging parties.” Abbott Labs.
            v. Gardner, 
387 U.S. 136
, 148-49, 
87 S. Ct. 1507
, 18 L.
            Ed. 2d 681 (1967), overruled on other grounds by
            Califano v. Sanders, 
430 U.S. 99
, 
97 S. Ct. 980
, 51 L.
            Ed. 2d 192 (1977). In assessing ripeness, there are two
            basic factors: “(1) the fitness of the issues for judicial
            decision[;] and (2) the hardship to the parties of
            withholding court consideration.” Abbott 
Labs., 387 U.S. at 149
, 
87 S. Ct. 1507
.
                    When a party challenges government action, the
            first factor becomes a question of whether the challenged
            conduct constitutes a final agency action. See Tokyo
            Kikai Seisakusho, Ltd. v. United States, 
529 F.3d 1352
,
            1363 (Fed. Cir. 2008); U.S. Ass’n of Imps. of Textiles &
            Apparel v. U.S. Dep’t of Commerce, 
413 F.3d 1344
,
            1349-50 (Fed. Cir. 2005) [(Textile Importers)]. Final
            agency action hinges on two points: “First, the action
            must mark the ‘consummation’ of the agency’s
            decision-making process – it must not be of a merely
            tentative or interlocutory nature. And second, the action
            must be one by which ‘rights or obligations have been
            determined,’ or from which ‘legal consequences will
            flow.’” Bennett v. Spear, 
520 U.S. 154
, 177-78, 117 S.
            Ct. 1154, 
137 L. Ed. 2d
281 (1997) (citations omitted).

SA-TECH, 691 F.3d at 1383-84
. It is the “final agency action” or “fitness” prong



                                        11
of the ripeness analysis which courts typically examine first.5

       Next, to satisfy the hardship prong of the ripeness analysis, the government
action’s impact upon a plaintiff must be “sufficiently direct and immediate.”
Abbott 
Laboratories, 387 U.S. at 152
. Abstract, avoidable or speculative harm is
not enough to satisfy the hardship prong. E.g., Texas v. United States, 
523 U.S. 296
, 301-02 (1998). Being forced to wait for an agency to issue a decision is
generally not enough to satisfy the hardship prong; the Federal Circuit has stated
that “any business uncertainty associated with awaiting a final decision from an
agency is different in kind and legal effect from the hardship identified in Abbott
Laboratories and insufficient to turn a threshold agency decision into a final
agency action ripe for review.” Textile 
Importers, 413 F.3d at 1350
. In the bid
protest context, there is no measurable hardship, at the time of the protest, flowing
from a future, hypothetical agency decision adverse to the protestor. See Texas
Bio- & Agro-Defense Consortium v. United States, 
87 Fed. Cl. 798
, 806 (2009)
(dismissing a protest on ripeness grounds and finding no hardship to the protestor
because “these [lost business opportunities] are not hardships that would stem
from a dismissal without prejudice [of this protest] on ripeness grounds – they are
hardships which would be suffered if Plaintiff’s proposed site is not ultimately
selected”) (emphasis added).

      Justiciability challenges focusing on ripeness are often brought under RCFC
12(b)(1), as is the case here. Justiciability, however, is not the same as subject
matter jurisdiction; ripeness and justiciability might best be described as limits on
the exercise of jurisdiction. See Madison 
Services, 90 Fed. Cl. at 680
n.3
(disagreeing with the government’s “characterization of either ripeness or
mootness as a per se limit on the court’s jurisdiction[,]” noting “lingering
uncertainty as to whether, and when, ripeness or mootness may operate as a limit
upon the jurisdiction of a federal court”) (citations omitted). In its most recent
pronouncement on this issue, the Federal Circuit distinguished between

       5
         / If it is determined that there is no final agency action to protest, the hardship prong
appears to be of lesser importance and is sometimes omitted entirely from the court’s discussion
of ripeness. See, e.g., Madison 
Services, 90 Fed. Cl. at 679-80
(dismissing a protest on ripeness
grounds without considering hardship to the protestor, because there was no final agency action
to protest); see also NSK Ltd. v. United States, 
510 F.3d 1375
, 1385 (Fed. Cir. 2007) (affirming
the dismissal of a claim as unripe solely because the agency action was not final, without
discussing hardship to the claimant).

                                                12
justiciability (in the sense of ripeness in particular) and subject matter jurisdiction.
See, e.g., Shinnecock Indian Nation v. United States, 
782 F.3d 1345
, 1348-52
(Fed. Cir. 2015) (treating these two threshold inquiries as to whether a complaint
should be dismissed as distinct). But see Morris v. United States, 
392 F.3d 1372
,
1375 (Fed. Cir. 2004) (stating that the Court of Federal Claims “does not have
jurisdiction over [takings] claims that are not ripe” (citing Howard W. Heck &
Assocs., Inc. v. United States, 
134 F.3d 1468
(Fed. Cir. 1998)). Nonetheless, it is
clear that an unripe claim, like a claim outside this court’s jurisdictional ambit,
must be dismissed without prejudice. Shinnecock Indian 
Nation, 782 F.3d at 1350
(citations omitted).

II.    Analysis

       A.     Ripeness

              1.      No Final Agency Action

        There is no final action of State that is the subject of plaintiff’s requests for
relief in the complaint. Instead, up to this point, State has simply applied the
cumulative total business volume formula, as did this court in Grunley Walsh, and
has prequalified both Pernix and Framaco for the Maputo procurement.6 Compl.
¶¶ 14-15, 17; Framaco Resp. at 4. That action, which favors plaintiff, is not being
attacked in this lawsuit. Until and if State changes its position on the eligibility of
Pernix for the Maputo procurement pursuant to the advice provided by GAO in
Caddell III there is no final agency action that is ripe for review in this court.7 See
Madison 
Services, 90 Fed. Cl. at 679
(“[P]laintiff’s original protest has never been
ripe for the court’s review, because no final agency decision [regarding] the
solicitation has ever been before the court.”).

     Framaco concedes that Pernix’s request for injunctive relief stated in the
complaint is not ripe, but attempts to distinguish that request from Pernix’s request

       6
        / Indeed, except for a brief period between GAO’s issuance of Caddell I and this court’s
issuance of Grunley Walsh, State appears, on this record, to have consistently preferred the
cumulative total business volume interpretation of § 4852(c)(2)(E).
       7
        / As Caddell correctly emphasizes, this court has no jurisdiction to review GAO
decisions such as Caddell III. Caddell Reply at 2 (citations omitted).

                                               13
for declaratory relief regarding the proper interpretation of § 4852(c)(2)(E). The
proposition advanced by Framaco is innovative but entirely unsupported by
persuasive authority8:

              The Pernix request for injunctive relief is premature
              because the United States Department of State (“State”)
              has not decided whether to follow the Government
              Accountability Office (“GAO”) recommendation and
              Pernix and Framaco currently remain prequalified for the
              Maputo, Mozambique procurement . . . . On the other
              hand, in light of the sharp disagreement between GAO
              and this Court on a critical legal issue regarding
              prequalification that impacts numerous State
              procurements in a manner that materially prejudices and
              harms Pernix, Framaco and similarly situated offerors,
              Pernix’s request for declaratory judgment is ripe for
              consideration by the Court.

Framaco Resp. at 1-2. The court finds no distinction, however, between requests
for declaratory or injunctive relief in determining the ripeness of this bid protest.

        The test for ripeness stated in Abbott Laboratories and SA-TECH applies to
requests for declaratory judgments as well as to requests for injunctive relief. See
Abbott 
Laboratories, 387 U.S. at 138
(reviewing the ripeness of an action
requesting both declaratory and injunctive relief). The court notes that the
underlying bid protest in SA-TECH requested both declaratory and injunctive
relief, but this court chose to offer only injunctive relief because the two types of
relief would provide the same functional relief to the protestor. See Sys.
Application & Techs., Inc. v. United States, 
100 Fed. Cl. 687
, 720 (2011)
(“Because the practical effect of this requested [declaratory] relief is to prevent the
Army from taking the proposed corrective action, it is ‘tantamount to a request for
injunctive relief.’ Thus, the court will limit its discussion to SA-TECH’s request
for the entry of a permanent injunction prohibiting the Army from undertaking its


       8
        / Framaco relies on CBY Design for its ripeness analysis. Framaco Resp. at 7. As stated
previously, the ripeness analysis presented in CBY Design diverges from Federal Circuit
precedent and is unhelpful here. See supra note 4.

                                              14
proposed corrective action.” (quoting PGBA, LLC v. United States, 
389 F.3d 1219
,
1228 (Fed. Cir. 2004))). Because the two forms of relief are functionally
indistinguishable in this type of bid protest, e.g., 
PGBA, 389 F.3d at 1228
, Pernix
cannot present an unripe claim for injunctive relief but simultaneously present a
ripe claim for declaratory relief. Pernix’s request for declaratory relief, like its
request for injunctive relief, has no final agency action at its base and must be
dismissed as unripe.

       Only one other issue raised by the parties merits discussion in the court’s
review of the “fitness” prong of the ripeness analysis. Plaintiff relies on two
Federal Circuit opinions which discuss the breadth of this court’s bid protest
jurisdiction in an effort to show that its protest is ripe. See Pl.’s Resp. at 5 (citing
Distributed Solutions, Inc. v. United States, 
539 F.3d 1340
(Fed. Cir. 2008);
RAMCOR Servs. Grp., Inc. v. United States, 
185 F.3d 1286
(Fed. Cir. 1999)).
Neither of those opinions addressed the ripeness doctrine, and further, as
defendant points out, the bid protest scenarios in RAMCOR and Distributed are
readily distinguishable from the procurements at issue here. See Def.’s Reply at
1-2 (“But plaintiff fails to note the key distinction between those cases and the
present action, which is that, in both of the cited cases, the Federal Circuit
contemplated jurisdiction over actual decisions and alleged violations by the
Government, not hypothetical ones.”) (citations omitted). There is no aid for
Pernix’s ripeness contentions in either of these Federal Circuit opinions.

        For all of the above-stated reasons, the court finds that Pernix’s protest is
not fit for adjudication because there is no final agency action for this court to
review. This finding is strong evidence that this protest is not ripe and is not
justiciable. See supra note 5. The court turns to the second ripeness factor, the
hardship prong, to confirm that dismissal of this protest without prejudice is
warranted.

             2.     No Hardship at This Juncture

       According to plaintiff, participation in Phase I and Phase II of an embassy
construction contract procurement “requires prospective and actual offerors to
incur substantial costs.” Pl.’s Resp. at 3. There appears to be no dispute that
Pernix has invested heavily in the competitions at issue in this suit, and that
uncertainty regarding the eligibility of Pernix for the Maputo procurement, and

                                           15
uncertainty regarding its eligibility for the other State procurements noted in the
complaint, has an impact on the company. See 
id. Ex. 1
¶ 6 (“The lack of clarity
regarding the legal standard for how to qualify contractors under the ‘total
business volume’ requirement is significantly impacting our company’s resources,
and will continue to do so until a final interpretation of the [statute] is achieved.”).
The parties dispute, however, whether the costs of such uncertainty satisfy the
hardship prong of the ripeness analysis. Compare Framaco Resp. at 8 (stating that
the “substantial harm” to Pernix shows that “the second factor, hardship,
overwhelmingly weighs in favor of ripeness”) and Pl.’s Resp. at 9 (“With respect
to the ‘hardship prong’ of the ripeness inquiry, the facts . . . show that it would be
the Court’s failure to act that would create hardship.”), with Def.’s Reply at 3-4
(“[A]lthough Pernix and Framaco assert hardship and injury to bolster their
arguments of both ripeness and standing, all such hardship or injury is speculative
and contingent upon State’s acceptance of the GAO’s recommendation, an action
that has not occurred yet and may not occur at all. . . . [B]ecause State could
decide to reject the GAO’s recommendation and keep Pernix and Framaco as
qualified participants, Pernix and Framaco cannot reasonably claim that they have
already been injured . . . .”) and Caddell Mot. at 4 (“In essence, Pernix has not
been harmed and shows no probability that it will be imminently harmed.”).

        As noted earlier in this opinion, the ripeness doctrine protects “agencies
from judicial interference until an administrative decision has been formalized and
its effects [are] felt in a concrete way by the challenging parties.” Abbott
Laboratories, 387 U.S. at 148-49
. In the dispute discussed in Abbott
Laboratories, the issue was ripe because the Commissioner of Food and Drugs
had construed a statute in a manner adverse to the plaintiffs, whereas here, State
has not yet acted to construe § 4852(c)(2)(E) in a manner adverse to Pernix.
Pernix has not yet “felt [the effects of a final agency action] in a concrete way.”
Abbott 
Laboratories, 387 U.S. at 148
. Nor has Pernix suffered “sufficiently direct
and immediate” effects of any final agency action. 
Id. at 152.
Under Abbott
Laboratories, Pernix has not satisfied the hardship prong of the ripeness analysis.

       The general rule is that the hardship prong of the ripeness test cannot be
satisfied by contingent or speculative harm. Texas v. United 
States, 523 U.S. at 301-02
; Texas Bio- & 
Agro-Defense, 87 Fed. Cl. at 806
. As defendant notes, this
rule prevents courts from issuing advisory opinions on abstract legal questions.
See Def.’s Mot. at 6 (citing cases); Def.’s Reply at 2-3 (same). Here, any hardship

                                           16
to Pernix flowing from Caddell III is still speculative and contingent, and the
hardship prong of the ripeness inquiry under Texas v. United States is not
satisfied.

      A similar result is obtained when this case is compared to Federal Circuit
precedent. In SA-TECH, the decision most on point, the hardship prong of the
ripeness inquiry was satisfied because the United States Army had made a final
decision affecting SA-TECH’s competitive advantages in an ongoing
procurement:

             With respect to the hardship element of the ripeness
             analysis, the Army asserts that SA-TECH has not
             suffered a hardship because the “announced intention to
             implement corrective action is an intermediate step of a
             single procurement process, and the continuation of that
             process, while SA-TECH remains in contention, is not a
             hardship.” Appellant’s Br. 26. As discussed above, this
             approach ignores the competitive hardships SA-TECH
             suffers as a result of the Army’s arbitrary decision to
             recompete the 
contract. 691 F.3d at 1385
. Thus, in SA-TECH, the Army had committed to a decision
adverse to the protestor, whereas here, State has made no such commitment.
Under SA-TECH, Pernix has not satisfied the hardship prong of the ripeness
analysis.

       Finally, the court finds Textile Importers to be instructive. At issue there
was the government’s decision to consider twelve petitions from domestic textile
producers requesting that the United States consult with China about certain
textile imports, a course of action which might have led to import restrictions
against those Chinese imports. A suit filed by an association of textile importers
to enjoin the consideration of those twelve petitions was found to be unripe. The
Federal Circuit provided this analysis focusing on the hardship prong of the
ripeness inquiry:

             In this case, the Association cites a number of actions
             taken by its members allegedly in response just to [the

                                         17
             government’s] decision to consider the twelve petitions.
             These actions were based on the businesses’ perceived
             uncertainty concerning whether, when, and to what
             extent import relief might be imposed in the future, but
             not on any legally binding requirement presently
             imposed by . . . the government. In contrast, Abbott
             Laboratories involved a mandatory regulation with
             binding legal effect that was issued after formal notice
             and comment and that was utterly unambiguous. Thus,
             following [Federal Trade Commission v. Standard Oil
             Co. of California, 
449 U.S. 232
(1980)], we hold that
             any business uncertainty associated with awaiting a final
             decision from an agency is different in kind and legal
             effect from the hardship identified in Abbott
             Laboratories and insufficient to turn a threshold agency
             decision into a final agency action ripe for review.

Textile 
Importers, 413 F.3d at 1350
. Here, there is no “legally binding
requirement” issued by State that harms Pernix – under Textile Importers, Pernix
has not satisfied the hardship prong of the ripeness inquiry. 
Id. As in
Textile
Importers, “any business uncertainty associated with awaiting a final decision
from an agency is different in kind and legal effect from the hardship identified in
Abbott Laboratories and insufficient” to establish ripeness. 
Id. At this
juncture,
there is no hardship to Pernix so as to render this bid protest ripe and justiciable.

      B.     Standing

       Both the government and Caddell assert that plaintiff lacks standing to bring
this protest. Def.’s Mot. at 7-8 & n.1; Def.’s Reply at 3-4; Caddell Reply at 6-8.
Having considered the precedential Federal Circuit decisions relied upon by the
parties, the court is not convinced that the facts in the bid protests underlying
those decisions are sufficiently analogous to this case. The court therefore
declines to extend various Federal Circuit pronouncements on bid protest standing
to the somewhat unusual circumstances of this case.

     Here, Pernix’s protest challenges a hypothetical elimination from
competition that has not yet occurred. That challenge is clearly barred on ripeness

                                          18
grounds. The court therefore sees no reason to reach or address the parties’ rather
convoluted arguments regarding Pernix’s standing to bring its unripe protest. See,
e.g., Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 
549 U.S. 422
, 431
(2007) (“[A] federal court has leeway to choose among threshold grounds for
denying audience to a case on the merits.”) (citations and internal quotations
omitted); Shinnecock Indian 
Nation, 782 F.3d at 1353
(affirming this court’s
dismissal of a suit on ripeness grounds but vacating this court’s alternative holding
that the suit should also be dismissed for lack of subject matter jurisdiction).

      C.     Multiple Procurement Protest

       Because Pernix’s bid protest is not ripe, the threshold issue of justiciability
requires dismissal of this suit. The court therefore need not address defendant’s
and Caddell’s alternative argument that four procurements cannot be addressed in
a single protest. The court notes, however, that there have been instances in which
this court has considered challenges to multiple procurements within a single
protest. E.g., Bannum, Inc. v. United States, 
60 Fed. Cl. 718
, 722 & n.6 (2004);
MCS Mgmt., Inc. v. United States, 
48 Fed. Cl. 506
, 509 (2001).

                                  CONCLUSION

      For the foregoing reasons, it is hereby ORDERED that:

      (1)    Defendant’s Motion to Dismiss, filed May 5, 2015, is GRANTED;

      (2)    Intervenor-Defendant Caddell’s Motion to Dismiss, filed May 5,
             2015, is GRANTED;

      (3)    Plaintiff Pernix’s Motion for Declaratory Judgment, and Preliminary
             and Permanent Injunction, filed April 27, 2015, is DENIED as moot;

      (4)    The Clerk’s Office is directed to ENTER final judgment in favor of
             defendant and intervenor-defendant, DISMISSING the complaint
             without prejudice;

      (5)    On or before June 10, 2015, counsel for the parties shall CONFER
             and FILE with the Clerk’s Office a redacted copy of this opinion,

                                          19
      with any material deemed proprietary marked out and enclosed in
      brackets, so that a copy of the opinion can then be prepared and made
      available in the public record of this matter; and

(6)   Each party shall bear its own costs.



                                       /s/Lynn J. Bush
                                       LYNN J. BUSH
                                       Senior Judge




                                  20

Source:  CourtListener

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