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4 CFR 21.5 (g): Procurements by Agencies Not Defined in 40 U.S.C. 472 and 28 U.S.C. § 1491

Comptroller General - Key Excerpts

New Under the Competition in Contracting Act of 1984 (CICA), our Office has jurisdiction to resolve bid protests concerning solicitations and contract awards that are issued "by a Federal agency." 31 U.S.C. § 3551(1). CICA provides that the term "Federal agency" has the meaning given in 40 U.S.C. § 102. 31 U.S.C.A. § 3551(3). Section 102 of Title 40 defines the term "Federal agency" as including any "executive agency," which is defined as any executive department or independent establishment in the executive branch of the government." 40 U.S.C. § 102(4), (5). The Mint, as part of the Department of the Treasury, is an executive agency that otherwise would be subject to our bid protest jurisdiction under CICA.

In 1996, however, Congress established the United States Mint Public Enterprise Fund (USMPEF) to finance the programs and operations of the Mint. See Treasury, Postal Service, and General Government Appropriations Act, 1996, Pub L. No. 104-52, § 522 (1995) (codified as amended at 31 U.S.C. § 5136). Of note, the establishing legislation for the USMPEF included the following proviso: "Provided further, That provisions of law governing procurement or public contracts shall not be applicable to the procurement of goods or services necessary for carrying out Mint programs and operations." 31 U.S.C. § 5136. The same provision defines Mint programs and operations as follows:

(1) the activities concerning, and assets utilized in, the production, administration, distribution, marketing, purchase, sale, and management of coinage, numismatic items, the protection and safeguarding of Mint assets and those non-Mint assets in the custody of the Mint, and the Fund; and (2) includes capital, personnel salaries and compensation, functions relating to operations, marketing, distribution, promotion, advertising, official reception and representation, the acquisition or replacement of equipment, the renovation or modernization of facilities, and the construction or acquisition of new buildings.

Id. The provision further contemplates that all receipts from Mint operations and programs be deposited in the USMPEF, and that all expenses incurred for operations and programs of the Mint that the Secretary of the Treasury determines to be ordinary and reasonable incidents of Mint operations and programs be paid out of the USMPEF. Id. As a result of these provisions, the agency represents that the Mint is entirely funded by and operates within the USMPEF. Agency Response to Opposition to Request to Dismiss at 1.

Because the establishing legislation provides that federal procurement laws and regulations do not apply to the procurement of goods or services necessary for carrying out the Mint's operations and programs, and those operations and programs are defined broadly enough to encompass substantially all of the Mint's activities, we conclude that the Mint is not subject to the terms of CICA. Furthermore, because the bid protest jurisdiction of our Office derives from CICA, we must conclude that the Mint is not subject to that jurisdiction.  (A-Z Cleaning Solutions B-415228: Nov 6, 2017)


As a preliminary matter, the agency argues that" GAO does not have authority to review this protest, and should dismiss it, because the contract at issue is funded with non-appropriated funds." OPIC Request for Dismissal at 2-3. We find, as explained below, that we have bid protest jurisdiction to review OPIC's award of a contract to MFMci.

Our authority to decide bid protests is set forth in the Competition in Contracting Act of 1984 (CICA), which defines a protest, as relevant here, to be a written objection by an interested party to an award of a contract by a federal agency for the procurement of property or services. See 31 U.S.C. sections 3551(1), 3553 (2006). Since the passage of CICA, our bid protest jurisdiction has not been based on the expenditure of appropriated funds. See USA Fabrics, Inc., B-295737, B-295737.2, Apr. 19, 2005, 2005 CPD para. 82 at 2. Rather, our threshold jurisdictional concern is whether the procurement at issue is being conducted by a federal agency. Americable Int'l, Inc., B-251614, B‑251615, Apr. 20, 1993, 93-1 CPD para. 336 at 2. In this regard, CICA adopted the definition of federal agency set forth in section 3 of the Federal Property and Administrative Services Act of 1949 (FPASA), 40 U.S.C. sect. 102 (2006). See 31 U.S.C. sect. 3551(3). FPASA defines a federal agency as including any"executive agency," which it defines as including any executive department or independent establishment in the executive branch of the government, and any wholly-owned government corporation. 40 U.S.C. sections 102(4), (5).

OPIC is specifically identified as a wholly-owned government corporation, 31 U.S.C. sect. 9101(3)(H), and is thus, as defined by CICA, a federal agency for the purposes of our bid protest jurisdiction. See Professional Pension Termination Assocs., B‑230007.2, May 25, 1988, 88-1 CPD para. 498 at 5 (GAO has bid protest jurisdiction over procurements of the Pension Benefit Guarantee Corporation, a wholly-owned government corporation).

Application of CICA and the FAR

OPIC also argues that, even if this procurement is within GAO's bid protest jurisdiction, our review of the protest is limited to reviewing the reasonableness of the agency's procurement actions because" the basic procurement statutes are not applicable" to OPIC. AR at 4. The agency believes it is otherwise exempt from CICA under various provisions of titles 22, 40, and 41 of the U.S. Code. See id. at 4-5.

Specifically, the agency argues that CICA, 41 U.S.C. sections 251-260, is not applicable to purchases by executive agencies, when “made inapplicable pursuant to section 113(e) of title 40 or any other law." See 41 U.S.C. sect. 252(a)(2). OPIC contends that section 113(e)(2) provides that nothing in FPASA "impairs or affects the authority of an executive agency, with respect to any program conducted for the purposes of . . . foreign aid." AR at 5.

The agency also contends that under the Foreign Assistance Act of 1961, as amended, 22 U.S.C. sect. 2151 et seq., and Executive Order 11223, OPIC is exempted from provisions of FPASA. See 22 U.S.C. sect. 2393(a). Specifically, OPIC states that Executive Order 11223 exempts OPIC from the provisions of 41 U.S.C. sections 5 and 8. See Executive Order 11223, Relating to the Performance of Functions Authorized by the Foreign Assistance Act of 1961, As Amended, sections 1(4), (5), (May 12, 1965), reprinted at 30 Fed. Reg. 6,635. The agency also notes that other provisions of the Foreign Assistance Act provide the agency with authority to expend funds "notwithstanding any other provision of law" and "without regard to such laws and regulations governing the obligation and expenditure of funds" with respect to the procurement here. AR at 5, citing 22 U.S.C. sections 2197(d)(3), 2396(b).

Finally, OPIC argues that CICA only applies to wholly-owned government corporations that are"fully subject to" the provisions of the Government Corporation Control Act (GCCA), as amended, 31 U.S.C. sections 9101-9110, and that GCCA is only "partially applicable" to OPIC. Id., citing 41 U.S.C. sect. 403(1)(D) (defining "executive agency"). In this respect, the agency explains that under 22 U.S.C. sect. 2199(c) (Audits of the Corporation), OPIC is "subject to the applicable provisions of [GCCA], except as otherwise provided in [22 U.S.C. sections 2191-2200b, OPIC's organic statute]." Id. (emphasis in original).

We find, as explained below, that the procurement at issue here is subject to the requirements of CICA, and that the agency has not identified any statute that expressly exempts it from CICA. We also find that the acquisition here is funded with appropriated funds and is subject to the FAR, which applies to the acquisition by contract with appropriated funds of supplies or services by and for the use of the federal government.  (MFM Lamey Group, LLC, B-402377, March 25, 2010)  (pdf)


In 2001 Congress enacted the Aviation Transportation Security Act, relevant portions of which are set forth at 49 U.S.C. sect. 114 (2004 Supp.), establishing the TSA as a new agency within the Department of Transportation and tasking it with broad transportation security responsibilities. Pursuant to 49 U.S.C. sect. 40110(d) (2005 Supp.), TSA procurements were subject to the Federal Aviation Administration’s (FAA) acquisition management system and, because the statute also stipulated that procurements under that system are exempt from our bid protest jurisdiction, TSA procurements were not subject to protests filed at our Office pursuant to TSA’s organic legislation.

Recent legislation effectively revised this Office’s jurisdiction over protests challenging TSA procurements. Specifically, the Consolidated Appropriations Act, 2008 (CAA), Pub. L. No. 110-161, 121 Stat. 1844, was enacted on December 26, 2007. That law repealed TSA’s authority to use the FAA’s acquisition management system, made TSA subject to the Federal Acquisition Regulation (FAR), and effectively provided jurisdiction for our Office to consider protests challenging TSA procurements. The CAA further provided that the changes flowing from that legislation “shall take effect 180 days after the date of enactment of this Act.” 121 Stat. 2092. There is no dispute that June 23, 2008 was the 180th day following enactment of the CAA.

In implementing the CAA’s legislative changes, the DHS published a rule providing that TSA acquisitions initiated after June 22, 2008 would be subject to the FAR. 73 Fed. Reg. 30,317 (2008). Similarly, and consistent with the DHS rule, this Office published proposed changes to our Bid Protest Regulations in March 2008 and, on June 9, 2008, issued the final rule changes, stating: “In light of the revised DHS regulations pertaining to the applicability of the FAR to TSA procurements, and in the interest of an orderly transition by TSA to FAR-based procurements, GAO will hear protests of TSA procurements covered by TSA solicitations issued on or after June 23.” 73 Fed. Reg. 32,429.

Here, Gage’s protest challenges the award of a contract to Lockheed pursuant to a solicitation that was issued by TSA on October 18, 2007--that is, more than 2 months prior to enactment of the CAA and more than 8 months prior to the effective date of that legislation. In pursuing this matter, Gage complains that, in addition to engaging in a direct conversion of activities performed by federal employees, TSA intends to improperly increase the scope of services Lockheed will perform beyond the services contemplated by the solicitation, specifically to include performance of human resource services at DHS headquarters.

We view the protest, including the argument regarding the scope of the services to be performed, as challenging TSA’s actions pursuant to the October 18 solicitation and, as such, outside of our jurisdiction. In short, consistent with the legislative provisions of TSA’s organic legislation, as subsequently amended by the CAA, along with this Office’s announcement that we would begin hearing protests challenging TSA procurements covered by TSA solicitations issued on or after June 23, our protest jurisdiction does not extend to Gage’s protest which challenges TSA’s contract award pursuant to a solicitation issued prior to June 23. (John Gage--Designated Employee Agent, B-400379, August 4, 2008) (pdf)  Also see, Carahsoft Technologies Corporation and Avue Technologies Corporation, B-400405, August 4, 2008)  (pdf)


In addition to establishing the CAP, section 1847 of title 18 includes a provision addressing administrative or judicial review of the agency’s actions. In this regard, section 1847(b)(10) states as follows:

There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of…(B) the awarding of contracts under this section.
See 42 U.S.C. sect. 1395w-3(b)(10).

The starting point of any analysis of the meaning of a statutory provision is the statutory language used by Congress. See Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980) (“We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself.”) Where the language is clear on its face, its plain meaning will be given effect; that is, if the intent of Congress is clear, “that is the end of the matter.” SmithKline Beecham Pharm., B‑271845, Aug. 23, 1996, 96-2 CPD para. 82 at 3, citing Chevron, U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842, (1984). Here, we find that the language in question is unambiguous. As stated, the language prohibits any judicial or administrative review of the awarding of contracts under section 1847. Based on this plain language, since the procurements here were conducted under section 1847, our Office is precluded from considering the protests of the awards.

Omnicare argues that section 1847(b)(10) does not preclude GAO’s review of its protest because the firm is not seeking review of the “awarding of contracts,” but rather is challenging the disqualification of its bid. We do not view this distinction as meaningful. The agency’s decision to reject the protester’s bid is a necessary aspect of determining which bidders are eligible for award under the solicitation. More specifically, in requesting that we find that its bid should not have been rejected, Omnicare necessarily is requesting that we find that it should have received an award. As such, we view the agency rejection of Omnicare’s bid as part of the process of the “awarding of contracts”; our review of its protest therefore is precluded by the statute. Omnicare also argues that the jurisdictional exemption in section 1847(b)(10) applies only to actions within the scope of the agency’s authority; since the agency’s allegedly improper actions here fall outside its statutory authority and required duties in administering a competitive bidding program as Congress intended, they are reviewable under this provision. Omnicare’s Comments, Mar. 31, 2008, at 3. We disagree. In prohibiting the reviewing of contract awards, section 1847(b)(10) makes no distinction based on whether the actions in question are “within the scope of the agency’s authority.” Again, therefore, we find that review by our Office is precluded. Finally, Dania, Chronic Care, and Wound Management argue that GAO is not precluded from reviewing their protests, since section 1847(b)(10) only pertains to administrative or judicial review. The protesters suggest that the term “administrative review” refers only to review by an executive branch entity; GAO, as a legislative branch agency, has a “legislative” not an administrative review role. Protesters’ Comments, Apr. 1, 2008, at 2. However, the protesters have provided no legal support for their narrow reading of the term “administrative” in the context of the statute here, and there is nothing in the statute itself or the legislative history that indicates Congress intended to exclude GAO review from the exempting language. See H.R. Conf. Rep. No. 108-391 (2003). This being the case, and because GAO is the principal federal agency with statutory authority to review bid protests, we think it is sufficiently clear that the exempting language was intended to preclude GAO review.  Accordingly, we reject the protesters’ interpretation here.  (Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical Equipment & Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC; Wound Management Technologies, Inc., B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5, May 1, 2008)  (pdf)


The Presidio Trust, a wholly-owned government corporation, is not subject to the General Accounting Office's bid protest jurisdiction under the Competition in Contracting Act of 1984 (CICA), since the Trust is statutorily exempt from all federal procurement laws and regulations but for certain enumerated exceptions that do not include CICA. (Performance Excavators, Inc., B-291771, March 17, 2003)  (pdf)  (txt)


We conclude that UNICOR's disagreement with the Corps's determination that UNICOR's products are not comparable as to price or delivery to private sector products is subject to the board's binding authority.  Accordingly, our Office will not review the matter.  Mississippi State Dep't of Rehab. Servs., supra.  (Federal Prison Industries, Inc., B-290546, July 15, 2002)

Comptroller General - Listing of Decisions

For the Government For the Protester
New A-Z Cleaning Solutions B-415228: Nov 6, 2017 MFM Lamey Group, LLC, B-402377, March 25, 2010  (pdf)
John Gage--Designated Employee Agent, B-400379, August 4, 2008 (pdf)  Carahsoft Technologies Corporation and Avue Technologies Corporation, B-400405, August 4, 2008)  (pdf)  
Eastern Medical Equipment, Inc.; Omnicare, Inc.; Dania Medical Equipment & Supplies, Inc.; Chronic Care Pharmaceutical Services, LLC; Wound Management Technologies, Inc., B-311423; B-311423.2; B-311423.3; B-311423.4; B-311423.5, May 1, 2008  (pdf)  
Performance Excavators, Inc., B-291771, March 17, 2003)  (pdf)  (txt)  
Federal Prison Industries, Inc., B-290546, July 15, 2002  

U. S. Court of Federal Claims - Key Excerpts

II. Subject Matter Jurisdiction

Defendant also argues that our bid protest jurisdiction does not extend to procurements conducted by the [Administrative Office of the United States Courts] AO and that plaintiff has not met its burden of establishing that the AO is a “Federal agency” within the meaning of 28 U.S.C. § 1491(b)(1). We agree. While the matter is not without doubt, we reject plaintiff’s underlying position that it is up to defendant to disprove subject matter jurisdiction; plaintiff has not carried its burden.

Section 1491(b)(1), our statutory grant of bid protest jurisdiction gives this court jurisdiction to hear challenges to “a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(1) (2012). Section 451 lists the definitions of certain terms used in Title 28. The term “agency” is defined as including “any department, independent established commission, administration, authority, board or bureau of the United States or any corporation in which the United States has a proprietary interest, unless the context shows that such term was intended to be used in a more limited sense.” 28 U.S.C. § 451.

In Novell, Inc. v. United States, 46 Fed. Cl. 601 (2000), Judge Miller went through a lengthy analysis of whether procurements by the AO can be protested under the court’s bid protest jurisdiction. She resolved the issue based on plaintiff’s burden of establishing the existence of jurisdiction, concluding that it had not done so. Id. at 613-14. Neither party is able to cite to subsequent consideration of the precise issue, and we are left in the same position as Judge Miller. Plaintiff has not persuaded us that any of the entities enumerated in section 451 embrace the AO , and plaintiff’s 4 argument drawn from the “unless” clause is particularly unpersuasive. We conclude, therefore, in the alternative, that plaintiff has not demonstrated that the court has subject matter jurisdiction over bid protests directed at procurement decisions of the AO.

Given our ruling on jurisdiction, it is unnecessary to address the parties’ arguments concerning the merits, or plaintiff’s entitlement to injunctive relief.  (U.S. Security Associates, Inc. v. U. S. and Securiguard, Inc., No. 15-1197C,  January 12, 2016)  (pdf)


II. RELEVANT PROCEDURAL HISTORY.

A. Before The United States Court Of Federal Claims.

On October 24, 2008, RCG filed a Complaint in the United States Court of Federal Claims alleging two causes of action: breach of an implied contract of fair and honest consideration and violation of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706. Compl. ¶¶ 14-20.

On March 31, 2009, the court issued a Memorandum Opinion And Final Order that dismissed the October 24, 2008 Complaint, pursuant to RCFC 12(b)(1). See RCG I, 86 Fed. Cl. at 480-87. As to the allegations in Count I regarding breach of an implied contract, the court held that the United States Court of Federal Claims did not have jurisdiction to adjudicate this claim under either section 1491(a)(1) or section 1491(b)(1) of Title 28 of the United States Code. Id. at 483-86. The court determined that the United States Court of Federal Claims’ jurisdiction to review bid protests as implied-in-fact contracts under section 1491(a)(1) did not survive the enactment of the Administrative Dispute Resolution Act of 1996 ("ADRA"), Pub. L. No. 104–320, § 12, 110 Stat. 3870, 3874–76 (1996). RCG I, 86 Fed. Cl. at 483-85. In addition, the court determined that “28 U.S.C. § 1491(b)(1) does not authorize the adjudication of bid protests concerning land leases where the Government is the lessor.” Id. at 486.

As to Count II of the October 24, 2008 Complaint, alleging a violation of the APA, the court determined that “the only forum that can adjudicate [RCG’s] challenge . . . is a United States District Court.” Id. at 487. Since the court held that it did not have jurisdiction to adjudicate the claims alleged in the October 24, 2008 Complaint, the court did not address the Government’s Motion To Dismiss pursuant to RCFC 12(b)(6). Id.

B. Before The United States Court Of Appeals For The Federal Circuit.

On March 1, 2010, the United States Court of Appeals for the Federal Circuit issued an Opinion, affirming that the United States Court of Federal Claims does not have jurisdiction under 28 U.S.C. § 1491(b)(1) to adjudicate Count I of the October 24, 2008 Complaint. See Resource Conservation Group, LLC v. United States, 597 F.3d 1238, 1247 (Fed. Cir. 2010) (“RCG II”). Our appellate court held that “Congress intended the [Section] 1491(b)(1) jurisdiction [provided by ADRA] to be exclusive where 1491(b)(1) provided a remedy (in procurement cases).” Id. at 1246.

In nonprocurement bid protests, however, where section 1491(b)(1) does not provide a remedy, the United States Court of Appeals for the Federal Circuit held that the United States Court of Federal Claims’ “implied-in-fact jurisdiction [under 28 U.S.C. § 1491(a)(1)] . . . survived the enactment of [section] 1491(b)(1).” Id. at 1246.

Therefore, our appellate court “conclude[d] that the [United States] Court of Federal Claims . . . had jurisdiction [to adjudicate Count I of the October 24, 2008 Complaint] under section 1491(a)(1)[,] because the implied-in-fact contract jurisdiction in nonprocurement cases that existed prior to 1996 survived the enactment of the ADRA.” RCG II, 597 F.3d at 1247. Accordingly, the case was remanded for further proceedings. Id. On June 1, 2010, the mandate issued.

C. Remand Proceedings Before The United States Court Of Federal Claims.

(sections deleted)

III. DISCUSSION.

4. The Court’s Resolution.

a. The Department Of The Navy Correctly Rejected Plaintiff’s Bid As Non-Responsive.

The primary issue is the reasonableness of the Navy’s interpretation of 10 U.S.C. § 6976, that in relevant part, provides:

[T]he real property containing the dairy farm (consisting of approximately 875 acres) – may not be declared to be excess real property to the needs of the Navy or transferred or otherwise disposed of by the Navy or any Federal agency.

10 U.S.C. § 6976(a)(2)(A).

Title 10 of the United States Code does not define the term “real property.” See 10 U.S.C. § 101 (providing definitions of certain terms for Title 10); 10 U.S.C. § 5001 (providing definitions of certain terms for Subtitle C of Title 10 (10 U.S.C. §§ 5001-7913.0) -- “Navy and Marine Corps”). Regulations issued by the Department of the Navy, however, provide:

Real and personal property under the jurisdiction of the Department of the Navy . . . may be disposed of under the authority contained in the . . . Federal Property Act [40 U.S.C. §§ 101-1315]. The Federal Property Act places the responsibility for the disposition of excess and surplus property located in the United States . . . with the Administrator of General Services. . . . Accordingly, in disposing of its property, the Department of the Navy is subject to applicable regulations of the Administrator of General Services[.]

32 C.F.R. § 736.1 (2006).

The Federal Management Regulations implicated by 32 C.F.R. § 736.1 (2006), were issued by the General Services Administration (“GSA”) to “[prescribe] policies concerning property management and related administrative activities.” 41 C.F.R. § 102-2.10 (2006); see also 41 C.F.R. § 102-71.5 (2006) (“GSA’s real property policies contained in . . . parts 102–72 through 102–82 of this chapter apply to Federal agencies . . . operating under, or subject to, the authorities of the Administrator of General Services. These policies cover the acquisition, management, utilization, and disposal of real property by Federal agencies[.]”).

Federal Management Regulations define “real property” as follows:

Standing timber and embedded gravel, sand, or stone under the control of any Federal agency, whether designated by such agency for disposition with the land or by severance and removal from the land, excluding timber felled, and gravel, sand, or stone excavated by or for the Government prior to disposition.

41 C.F.R. § 102-71.20 (2006).

Therefore, the Navy correctly determined that the embedded gravel and sand on the Dairy Farm Property site were “real property,” and that leasing the Dairy Farm Property to mine embedded gravel and sand would dispose of “the real property containing the dairy farm.” 10 U.S.C. § 6976(a)(2)(A).

RCG’s contention that 10 U.S.C. § 6976 is intended to prevent “fragmentation” of the Dairy Farm Property has no support in the statutory language, legislative history, applicable regulations, or the record. In addition, RCG’s argument that the RCG’s proposed use would maintain the land’s rural and agricultural nature is irrelevant. Section 6976 requires that “[a]ny lease of property at the Naval Academy dairy farm shall be subject to a condition that the lessee maintain the rural and agricultural nature of the leased property.” 10 U.S.C. § 6976(b)(2). RCG’s proposal, however, was not rejected for failing to maintain the rural and agricultural nature of the property, but because the Navy “determined that the activities and transactions proposed [by RCG] do not fall within the scope of the [S]olicitation[,] because they constitute[d] the disposal of real property.” Pl. Ex. 2. For this reason, the Navy’s letter notifying RCG that its bid was non-responsive does not mention the requirement that the “rural and agricultural nature” of the Dairy Farm Property be maintained.

For these reasons, the court has determined that the Navy correctly rejected RCG’s bid as non-responsive for failing to comply with 10 U.S.C. § 6976.

2. The Department Of The Navy Did Not Breach An Implied Contract With Plaintiff.
The October 24, 2008 Complaint alleges that, even if the Navy correctly interpreted 10 U.S.C. § 6976 and properly rejected RCG’s bid as non-responsive, nevertheless, the Navy breached an implied-in-fact contract by not complying with the “obligation of fair dealing to apprise all potential bidders of its interpretation regarding the merits of the bid.” Compl. ¶ 16.

2. The Department Of The Navy Did Not Breach An Implied Contract With Plaintiff.

The October 24, 2008 Complaint alleges that, even if the Navy correctly interpreted 10 U.S.C. § 6976 and properly rejected RCG’s bid as non-responsive, nevertheless, the Navy breached an implied-in-fact contract by not complying with the “obligation of fair dealing to apprise all potential bidders of its interpretation regarding the merits of the bid.” Compl. ¶ 16.

In Southfork Systems, Inc. v. United States, 141 F.3d 1124 (Fed. Cir. 1998), the United States Court of Appeals for the Federal Circuit held:

The ultimate standard for determining whether an unsuccessful bidder is entitled to relief on the ground that the [G]overnment breached the implied-in-fact contract to consider all bids fairly and honestly is whether the [G]overnment's conduct was arbitrary and capricious.

Id. at 1132 (citation omitted).

In adjudicating whether an implied-in-fact contract was breached on these grounds, the following four factors were identified for the trial court to consider:

(1) subjective bad faith on the part of the [G]overnment; (2) absence of a reasonable basis for the administrative decision; (3) the amount of discretion afforded to the procurement officials by applicable statutes and regulation; and (4) proven violations of pertinent statutes or regulations.

Id. (citations omitted). Importantly, there is no requirement . . . that each of the factors must be present in order to establish arbitrary and capricious action by the [G]overnment.” Prineville Sawmill Co., Inc. v. United States, 859 F.2d 905, 911 (Fed. Cir. 1988).

As to the first factor, the October 24, 2008 Complaint does not allege, nor has the court otherwise found in the record, any evidence of bad faith on the part of the Navy. See Galen Medical Associates, Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (“[W]hen a bidder alleges bad faith, in order to overcome the presumption of good faith on behalf of the [G]overnment, the proof must be almost irrefragable. Almost irrefragable proof amounts to clear and convincing evidence.”) (internal quotations and citations omitted). As a matter of law, the allegations in the October 24, 2008 Complaint that the Navy “erroneously interpreted 10 U.S.C. § 6976” (Compl. ¶ 11) and failed to disclose “information that it knew or should have known” (Compl. ¶ 16) are not sufficient to “overcome the presumption of good faith on behalf of the [G]overnment.” Galen Med. Assocs., 369 F.3d at 1330.

With respect to the second factor, the court has determined that the Navy’s interpretation of 10 U.S.C. § 6976 was correct and that the Navy had a reasonable basis for the rejection of RCG’s bid as non-responsive.

Regarding the third factor, the predecessor to our appellate court has held that “the greater the discretion granted to a contracting officer, the more difficult it will be to prove the decision was arbitrary and capricious.” Burroughs Corp. v. United States, 617 F.2d 590, 597 (Ct. Cl. 1980). Section 6976(b)(1) provides:

[T]he Secretary of the Navy may lease the real property containing the dairy farm, and any improvements and personal property thereon, to such persons and under such terms as the Secretary considers appropriate.

10 U.S.C. § 6976(b)(1) (emphasis added). Therefore, the Secretary had complete discretion to reject RCG’s proposed use.

Finally, since the court has determined that the Navy’s interpretation of 10 U.S.C. § 6976 was correct, Plaintiff cannot prove that the Navy violated any statutes or regulations in connection with the Solicitation.

In the alternative, RCG argues that the Navy breached the implied-in-fact contract by withholding knowledge of its interpretation of 10 U.S.C. § 6976. See Compl. ¶ 16; see also Pl. Opp. at 4-6; Pl. Supp. at 7. The United States Court of Appeals for the Federal Circuit, however, in AT&T Communications, Inc. v. Perry, 296 F.3d 1307, 1312 (Fed. Cir. 2002), has held that to prevail on such a claim, a plaintiff must

produce specific evidence that it (1) undertook to perform without vital knowledge of a fact that affects performance costs or direction, (2) the government was aware the contractor had no knowledge of and had no reason to obtain such information, (3) any contract specification supplied misled the contractor, or did not put it on notice to inquire, and (4) the [G]overnment failed to provide the relevant information.

Id. at 1312 (citation omitted).

RCG claims the Navy withheld its interpretation of 10 U.S.C. § 6976, that prohibited the mining of embedded sand and gravel on the Dairy Farm Property, from RCG. The Solicitation, however, in section 3.4 -- “Use Restrictions,” provides: “The use of the [Dairy Farm Property] shall be in compliance with 10 U.S.C. § 6976[.]” Gov’t Ex. at 5. In addition, Appendix A to the Solicitation provides the text of 10 U.S.C. § 6976 (Gov’t Ex. at 2), and Appendix F identifies “[a]dditional use restrictions” (Gov’t Ex. at 6).

As a matter of law, “[t]he parties [in a government contract action] are charged with knowledge of law and fact appropriate to the subject matter, and reasonable professional competence in reading and writing contracts is presumed.” Turner Const. Co., Inc. v. United States, 367 F.3d 1319, 1321 (Fed. Cir. 2004) (citation omitted). Although the Navy did not cite the specific applicable regulations nor the Navy’s internal interpretation of the statute in the Solicitation, RCG is held accountable for “knowledge of law . . . appropriate to the subject matter” and “reasonable professional competence in reading” the contract. Id. The Navy, therefore, provided RCG with all the relevant information required to prepare a bid. See 44 U.S.C. § 1507 (“Unless otherwise specifically provided by statute, [the] filing of [an Executive order or a rule or regulation issued by a federal agency in the Federal Register] . . . is sufficient to give notice of the contents of the document to a person subject to or affected by it.”); see also Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (“Just as everyone is charged with knowledge of the United States Statutes at Large, Congress has provided that the appearance of rules and regulations in the Federal Register gives legal notice of their contents.”) (citation omitted). Moreover, if RCG had any question as to the applicable regulations, RCG could have asked the Navy for clarification prior to submitting its bid. See Gov’t Ex. at 16-22 (Amendments 2-4 to the Solicitation, containing questions by bidders concerning the Solicitation and the Navy’s responses to those questions). RCG did not do so.

Accordingly, since RCG has failed to establish the requirements of a breach of implied contract with the Navy, the court has determined that the Navy did not breach an implied contract of good faith and fair dealing.  (Resource Conservation Group, LLC v. United States, No. 08-768C, January 11, 2011) (pdf)


In the 1990’s, the Naval Academy determined that it would be cheaper to purchase milk commercially. Id. Consequently, Congress included a provision in the Defense Authorization Act for Fiscal Year 1998 that authorized closure of the dairy operations. Id.; see also 10 U.S.C. § 6976(a) (codifying the Naval Academy’s authority to “terminate or reduce the dairy or other operations conducted at the Naval Academy dairy farm located in Gambrills, Maryland[,]” so long as its “rural and agricultural nature” is maintained). From 2000 to January 2005, the Naval Academy leased the dairy to Horizon Organic Holding Corp., a Boulder, Colorado-based milk producer. See Int e r na t iona l Dair y Food’ s Assoc i a t ion’ s webs i te, available at http://www.idfa.org/dbrief/dbrief012804.html (last visited March 30, 2009).

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On April 30, 2007, the Navy Contracting Officer informed Plaintiff that its proposal did not “fall within the scope of the [November 28, 2005] solicitation,” because disposal of real property was prohibited. See Pl. Ex. 2; see also Compl. ¶ 8. Accordingly, Plaintiff’s proposal would not be considered. See Compl. ¶ 8.

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On October 24, 2008, Plaintiff filed a Complaint in the United States Court of Federal Claims, alleging breach of an implied contract of fair and honest consideration and violation of the Administrative Procedure Act, 5 U.S.C. § 706 (“APA”). See Compl. ¶¶ 14-20. The Complaint requests recovery of bid preparation costs and fees in the amount of $500,000. Id.

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III. DISCUSSION.

A. Jurisdiction.

The jurisdiction of the United States Court of Federal Claims is established by the Tucker Act. See 28 U.S.C. § 1491. This Act authorizes the court “to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” Id. § 1491(a)(1). The Tucker Act, however, is “a jurisdictional statute; it does not create any substantive right enforceable against the United States for money damages. . . . [T]he Act merely confers jurisdiction upon it whenever the substantive right exists.” See United States v. Testan, 424 U.S. 392, 398 (1976). Therefore, a plaintiff must identify and plead an independent contractual relationship, constitutional provision, federal statute, or executive agency regulation that provides a substantive right to money damages. See Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc) (“The Tucker Act itself does not create a substantive cause of action; in order to come within the jurisdictional reach and the waiver of the Tucker Act, a plaintiff must identify a separate source of substantive law that creates the right to money damages.”). The burden of establishing jurisdiction falls upon the plaintiff. See FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990) (holding that the burden is on the plaintiff to allege facts sufficient to establish jurisdiction); see also RCFC 12(b)(1).

The Tucker Act, as amended by the Administrative Dispute Resolution Act of 1996 (“ADRA”), Pub. L. No. 104-320, §§ 12(a), (b), 110 Stat. 3870 (1996), codified at 28 U.S.C. § 1491(b), also authorizes the United States Court of Federal Claims 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.” 28 U.S.C. § 1491(b;) (1) see also Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1350 (Fed. Cir. 2004) (“The [United States] Court of Federal Claims has jurisdiction to review both pre-award and post-award bid protests pursuant to 28 U.S.C. § 1491(b), enacted as part of the Administrative Dispute Resolution Act of 1996[.]”).

The October 24, 2008 Complaint states that the court has jurisdiction over this dispute, pursuant to 28 U.S.C. § 1491(a)(1),3 “as a result of an implied contract with the United States via the U.S. Department of Navy,” and pursuant to 28 U.S.C. § 1346(a)(2),4 “as the damages claimed exceed[] Ten Thousand Dollars ($10,000.00) where the United States is the defendant.” Compl. ¶¶ 3-4. Plaintiff’s jurisdictional claims are addressed below.

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IV. THE GOVERNMENT’S DECEMBER 23, 2008 MOTION TO DISMISS, PURSUANT TO RCFC 12(b)(1).

A. Count I - Alleged Breach Of An Implied Contract Of Fair And Honest
Consideration.

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4. The Court’s Resolution.

First, Section 1346(a)(2) of Title 28 of the United States Code, known as the “Little Tucker Act,” “standing alone, does not create a right to money damages.” Locke v. United States, 77 Fed. Cl. 460, 466 (2007); see also Litzenberger v. United States, 89 F.3d 818, 820 (Fed. Cir. 1996) (“Although [28 U.S.C. § 1346(a)(2)] waives sovereign immunity, it does not create any substantive right enforceable against the United States for money damages. . . . Thus, for a claim to be based on the Little Tucker Act, it must be founded on a provision that can fairly be interpreted as mandating compensation from the United States.”). Accordingly, Section 1346(a)(2) does not authorize the court to adjudicate the claims alleged in the October 24, 2008 Complaint.

Second, regarding 28 U.S.C. § 1491(a)(1), prior to the 1996 enactment of the ADRA, the United States Court of Federal Claims reviewed bid protests as if they were implied-in-fact contracts. See Information Sciences Corp. v. United States, 85 Fed. Cl. 195, 204 (2008) (citing Southfork Sys., Inc. v. United States, 141 F.3d 1124, 1132 (Fed. Cir. 1998) (en banc) (Under the Tucker Act, “[t]he jurisdictional basis [for bid protests] is the alleged breach of an implied contract to have the involved bids fairly and honestly considered.”) (internal quotation omitted)). The passage of the ADRA, however, “remedied this situation by explicitly providing that a protester had an independent cause of action to ‘object[] 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 proposed procurement.’” Id. at 204 (quoting 28 U.S.C. § 1491(b)(1)). The judges of the United States Court of Federal Claims, however, have differed on the issue of whether the implied-in-fact contract doctrine, as it relates to bid protests, survived the enactment of the ADRA.

On two prior occasions, the United States Court of Appeals for the Federal Circuit has
declined to resolve these different perspectives. See Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1082 n. 9 (Fed. Cir. 2001) (“[W]e decline to address whether the implied contract theory survives the ADRA.”); see also Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 n. 6 (Fed. Cir. 2001) (“Although it has been argued that the implied contract theory survives the 1996 amendment [of the ADRA] . . . we need not decide this issue.”) (citation omitted).

The undersigned judge, however, also observed that “[t]he ADRA did not make any changes to 28 U.S.C § 1491(a)(1), the foundational jurisdictional statute for the Unites States Court of Federal Claims[,]” and the text of the ADRA does not explicitly state whether the implied-in-fact contract doctrine survives the bill’s enactment. See Information Sciences, 85 Fed. Cl. at 205. But, prior to the enactment of the ADRA, the Government’s conduct in bid protest cases was evaluated as an implied-in-fact contract under a “fairly and honestly considered” standard. Id. (citations omitted). With the enactment of the ADRA, Congress changed the substantive standard and directed that the Government’s conduct be reviewed under the APA’s “arbitrary, capricious, an abuse of direction, or otherwise not in accordance with the law” standard. Id.; see also 28 U.S.C. 1491(b)(4) (“In any action under this subsection, the courts shall review the agency’s decision pursuant to the standards set forth in [S]ection 706 of [T]itle 5 [of the APA].”). Therefore, the court reasoned, if 28 U.S.C. § 1491(a)(1) reserved the right to bring a bid protest under the implied-in-fact contract doctrine, “that claim would be evaluated under a different standard than a claim brought under the express bid protest jurisdiction of 28 U.S.C. § 1491(b).” Information Sciences, 85 Fed. Cl. at 205. The legislative history of the ADRA suggests that one of the goals of the Act was to eliminate this very situation. Id.

For these reasons, the court also has determined in this case that the United States Court of Federal Claims does not have jurisdiction under 28 U.S.C. § 1491(a)(1) to adjudicate the alleged breach of an implied-in-fact contract arising in the context of a bid protest.

The only remaining issue is whether the court has jurisdiction, under 28 U.S.C. § 1491(b)(1), to adjudicate bid protests involving leases of land where the Government is the lessor. See Pl. Opp at 16 n. 1. In Catholic University of America v. United States, 49 Fed. Cl. 795 (2001), the court considered whether “28 U.S.C. § 1491(b) [] is limited to suits challenging the Government’s procurement activities, and does not extend to suits involving the Government’s sale or lease of real property.” Id. at 799. The court examined the language “in connection with a procurement or proposed procurement,” set forth in 28 U.S.C. § 1491(b)(1), and accepted the Government’s construction that this clause:

is designed to modify each of the phrases that precede it, such that an interested party may object to: (i) a solicitation in connection with a procurement or proposed procurement; (ii) a proposed award in connection with a procurement or proposed procurement; (iii) an actual award in connection with a procurement or proposed procurement; or (iv) any alleged violation of statute or regulation in connection with a procurement or proposed procurement.

Id. at 799. Therefore, the court concluded that 28 U.S.C. § 1491(b) is “a provision governing the procurement process.” Id. at 800. The Catholic University court, however, declined to adopt the Government’s corollary argument that “procurement” should be construed narrowly. Id. (“Because § 1491’s legislative history offers such an unequivocal expression of congressional purpose, we think it reasonable - indeed, necessary - to read the word ‘procurement’ in [S]ection 1491 not in the limited sense of referring just to the Government’s acquisition of supplies or services, but rather as a more general reference to the process by which the Government endeavors to fulfill any of its needs through the mechanics of a solicitation and contract award.”). Instead, the court held that the United States Court of Federal Claims’ bid protest jurisdiction under 28 U.S.C. § 1491(b)(1) extends “to any pre-award challenge to the Government’s conduct of a solicitation or contract award irrespective of whether the Government was engaged in the acquisition or the distribution of property.” Id. (emphasis added). Accordingly, that court exercised jurisdiction over a bid protest of a government solicitation inviting proposals for lease-based development of federal land, holding that, since the solicitation was issued “in connection with a proposed procurement,” 28 U.S.C. § 1491(b)(1) authorized adjudication of all bid protests arising thereunder. Id. at 799-800. This decision, however, was never appealed and is not controlling. See West Coast General 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.”).

The court construes the scope of 28 U.S.C. § 1491(b)(1) in a different manner. Section 1491(b)(1) does not define “procurement” or “proposed procurement.” See 28 U.S.C. § 1491(b)(1). In Distributed Solutions, Inc. v. United States, 539 F.3d 1340 (Fed. Cir. 2008), however, the United States Court of Appeals for the Federal Circuit looked to the definition of “procurement” in 41 U.S.C. § 403(2), i.e., “a subsection of the statutory provisions related to establishing the Office of Federal Procurement Policy in the Office of Management and Budget,” that provides “overall direction for federal procurement policies, regulations, procedures, and forms.” Id. at 1346 (citations omitted). Section 403(2) defines “procurement” to “include[] 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). Therefore, our appellate court held that “in connection with a procurement or proposed procurement,” by definition involves “a connection with any stage of the federal contracting acquisition process, including ‘the process for determining a need for property or services.’” Distributed Solutions, 539 F.3d at 1346 (emphasis added). In this case, the Government is not acquiring any property or services to fulfill a need. See Distributed Solutions, 539 F.3d at 1346. In addition, the Government is not utilizing appropriated funds. See 41 U.S.C. § 403(16) (“acquisition” is the “process of acquiring, with appropriated funds”); see also 48 C.F.R. § 2.101 (defining “acquisition” as “the acquiring by contract with appropriated funds of supplies or services[.]”). Significantly, the Federal Acquisition Regulation 2.101 defines “procurement” by cross reference, i.e., “(see ‘acquisition’).” 48 C.F.R. § 2.101. Since the Government is not “acquiring,” 28 U.S.C. § 1491(b)(1) also does not convey jurisdiction over this activity. Moreover, the distinction between the Government leasing government-owned property and the Government acquiring property or services via purchase or lease has been recognized by the Government Accountability Office. See Meyers Companies, Inc., 97-1 CPD P 148 (Comp. Gen. April 23, 1997) (“As a general rule, protests concerning offers to sell or lease government-owned real property are not for consideration under our Office’s bid protest function. Under the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. § 3551 (1994), our Office is authorized to review protests concerning proposed contracts for the ‘procurement of property or services’ by a federal agency. Transactions for the lease of federal land do not generally involve a procurement of property or services, and therefore are not encompassed by our CICA bid protest authority.”). Therefore, the lease of land by the Government is not a government acquisition and cannot be made “in connection with a procurement or proposed procurement.” See John Cibinic, Jr. & Ralph C. Nash, Jr., FORMATION OF GOVERNMENT CONTRACTS 3, 13-14 (3d ed. 1998) (contrasting the “rental of real property” by the Government as a procurement (i.e., an “acquisition”) from the “sale of property” (or “disposal” of real property) as a “nonprocurement transaction” (i.e., a non-acquisition transaction)).

For these reasons, the court has determined that 28 U.S.C. § 1491(b)(1) does not authorize the adjudication of bid protests concerning land leases where the Government is the lessor. Accordingly, Count I of the October 24, 2008 Complaint is dismissed for lack of subject matter jurisdiction. See RCFC 12(b)(1).

B. Count II - Alleged Violation Of The Administrative Procedure Act.

Count II of the October 24, 2008 Complaint also alleges that the Government’s actions were arbitrary and capricious and in violation of the Administrative Procedure Act, 5 U.S.C. § 706. See Compl. ¶¶ 17-20. The Complaint alleges that Plaintiff conformed to the requirements of the invitation to bid. Id. ¶ 19. Therefore, Plaintiff’s proposal should not have been rejected as nonresponsive. Id. But for the Government’s arbitrary and capricious actions, Plaintiff would have had a substantial chance of being awarded the lease. Id. ¶ 20.

4. The Court’s Resolution. In 1996, the United States Congress enacted the ADRA, providing that “the [United States] Court of Federal Claims . . . shall have . . . jurisdiction over bid protest actions, and . . . ‘shall review the agency’s decision pursuant to the standards set forth in [S]ection 706 of [T]itle 5.’” 28 U.S.C. § 1491(b). Such protests were to be evaluated pursuant to an APA standard. See Impresa, 238 F.3d. at 1332 (“Under the APA standards . . . a bid award may be set aside if either: (1) the procurement official’s decision lacked a rational basis; or (2) the procurement procedure involved a violation of regulation or procedure.”). It is well established that the United States Court of Federal Claims, however, does not have jurisdiction to review an agency decision under the APA. See Martinez v. United States, 333 F.3d 1295, 1313 (Fed. Cir. 2003) (holding that the United States Court of Federal Claims does not have APA jurisdiction); see also Crocker v. United States, 37 Fed. Cl. 191, 197 (1997) (same).

Therefore, the only forum that can adjudicate Plaintiff’s challenge to the Navy’s interpretation of 10 U.S.C. § 6976 is a United States District Court. For these reasons, Count II of the October 24, 2008 Complaint is dismissed for lack of subject matter jurisdiction. See RCFC 12(b)(1).  (Resource Conservation Group, LLC v. U. S. Department of the Navy, No. 08-768C, March 31, 2009)  (pdf)


1. The Language of Section 1491(b)

"When interpreting a statute, the Court must begin with the language of the statute itself.” Hopi Tribe v. United States, 55 Fed. Cl. 81, 87 (2002) (citing Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980)). Section 1491(b) provides that the Court of Federal Claims “shall have jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency . . . .” 28 U.S.C. § 1491(b)(1) (emphasis added). The Tucker Act “is explicit that the entity that issues the solicitation must be a federal agency.” Blue Water Envtl., Inc. v. United States, 60 Fed. Cl. 48, 51 (2004). Therefore, the court must address whether the [Army and Air Force Exchange Service] AAFES constitutes a “Federal agency” within the meaning of the Tucker Act.

The ADRA incorporated the term “Federal agency” into 28 U.S.C. § 1491(b)(1) but did not define it. Nevertheless, the term “agency,” for purposes of title 28 of the United States Code, “includes any department, independent establishment, commission, administration, authority, board or bureau of the United States or any corporation in which the United States has a proprietary interest, unless the context shows that such term was intended to be used in a more limited sense.”12 28 U.S.C. § 451. The Federal Circuit explained that “[section] 451 dictates that an ‘agency’ for purposes of Title 28 must be within the domain of the United States. Accordingly, ‘federal agency’ as used in 28 U.S.C. § 1491(b)(1) falls within the ambit of ‘agency’ as used in 28 U.S.C. § 451.” Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1080 (Fed. Cir. 2001); see also Blue Water Envtl., Inc., 60 Fed. Cl. at 51 (“It is wellsettled that for purposes of determining Tucker Act jurisdiction, the definition of ‘agency’ in 28 U.S.C. § 451 is controlling.”); Hewlett-Packard Co. v. United States, 41 Fed. Cl. 99, 103 (1998) (explaining that “it is difficult to conclude that Congress intended to substantively modify the term ‘agency’ with the word ‘Federal’”). Therefore, “the court is not persuaded that there is a need to look beyond title 28 to interpret the meaning of the Tucker Act.”13 Hewlett-Packard Co., 41 Fed. Cl. at 103; see also id. (“[N]othing in the . . . legislative history suggests that Congress intended to invoke a definition from another statute.”).

Plaintiff has not argued that the AAFES is a “department,” an “independent establishment,” a “commission,” an “administration,” an “authority,” a “board or bureau of the United States,” or a “corporation in which the United States has a proprietary interest” such that it is a “Federal agency” for purposes of the ADRA. If she had advanced such an argument, however, plaintiff would have been unsuccessful. As an initial matter, the court notes that the terms used in the section 451 definition of “agency” are not further defined in title 28 of the United States Code. Thus, the court turns to title 5 of the United States Code for elucidation. Connolly v. United States, 1 Cl. Ct. 312, 314-15 (1982) (relying upon definitions contained in title 5 of the United States Code for the purpose of determining jurisdiction under the Tucker Act), aff’d in part, rev’d in part, 716 F.2d 882 (Fed. Cir. 1983). The United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) has determined that the AAFES, “by statutory definition[,] is not an executive department, military department, executive agency, or independent establishment” within the meaning of title 5 of the United States Code, Honeycutt v. Long, 861 F.2d 1346, 1349 (5th Cir. 1988), and the court has found neither binding nor persuasive authority to the contrary.

Therefore, the court determines that the AAFES is not a “Federal agency” under section 1491(b). Because the court determines that the AAFES is not a “Federal agency” under section 1491(b), plaintiff’s bid protest claim falls outside the jurisdictional grant conferred upon the Court of Federal Claims by the ADRA. This conclusion is ultimately supported by several district court decisions that have addressed challenges to AAFES procurements under the APA. 

(sections deleted)

B. The Court Possesses Jurisdiction Over Plaintiff’s Protest Under Section 1491(a)(1)

Where the ADRA does not provide jurisdiction over certain claims, the Federal Circuit has held that implied-in-fact contract jurisdiction remains available. Res. Conservation Group, LLC, 597 F.3d at 1245. In Resource Conservation Group, LLC, the United States Naval Academy (“Navy”) issued a Request of Interest for proposals to lease property that was utilized as a dairy farm. Id. at 1240. After receiving an expression of interest from the protester, Resource Conservation Group (“RCG”), and other parties, the Navy issued a Notice of Availability for Lease. Id. Interested bidders toured the property, and RCG toured the property twice in order to survey and test the area for the presence of sand and gravel. Id. Thereafter, RCG submitted a proposal to lease the property in order to mine it for sand and gravel. Id. at 1241.

The Navy apprised RCG that its proposal did not fall within the scope of the solicitation because the disposal of sand and gravel, which were construed as real property pursuant to 41 C.F.R. § 102-71.20, was prohibited. Id. The Navy contended that it had no obligation during the prebid process to apprise RCG that its bid would not be reviewed. Id. RCG filed a bid protest with the GAO, which dismissed the protest on the basis that a solicitation regarding a lease of government-owned land did not constitute a procurement of property or services and was therefore outside the GAO’s bid protest jurisdiction. Id. RCG thus filed suit in the Court of Federal Claims. Id. The court held that it lacked jurisdiction under 28 U.S.C. § 1491(b)(1) to adjudicate bid protests involving leases of land where the government was the lessor because the action was not in connection with a procurement or proposed procurement. Id. at 1242. It also held that the right to sue under an implied-in-fact contract pursuant to 28 U.S.C. § 1491(a)(1) was impliedly repealed when section 1491(b)(1) was enacted as part of the ADRA. Id. at 1241.

The Federal Circuit affirmed the trial court’s determination that RCG’s claim was not encompassed within section 1491(b)(1). Id. at 1243-45. However, it reversed the trial court’s ruling that the Court of Federal Claims lacked jurisdiction under section 1491(a)(1). Id. at 1245- 47. The Federal Circuit observed that the Court of Federal Claims, prior to the enactment of section 1491(b)(1), exercised jurisdiction over solicitations for the sale of government property and nothing in the ADRA repealed that jurisdiction. Id. at 1245-46. Analyzing the ADRA’s legislative history, the Federal Circuit explained that the statute “was meant to unify bid protest law in one court under one standard. However, it seems quite unlikely that Congress would intend that statute to deny a preexisting remedy without providing a remedy under the new statute.” Id. at 1246. Therefore, it concluded that “Congress did not intend to alter or restrict the Court of Federal Claims’ existing jurisdiction in cases not covered by the new statute.” Id.

The Federal Circuit restricted its analysis in Resource Conservation Group, LLC to a claim that did not fall within the court’s bid protest jurisdiction under section 1491(b)(1). Since RCG could not bring its claim pursuant to section 1491(b)(1), RCG invoked the court’s section 1491(a)(1) implied-contract jurisdiction over nonprocurement solicitations. Id. at 1241. The Federal Circuit concluded that the Court of Federal Claims possessed jurisdiction over RCG’s implied-in-fact contract claim: “Congress intended . . . [section] 1491(b)(1) jurisdiction to be exclusive where [section] 1491(b)(1) provided a remedy (in procurement cases).” Res. Conservation Group, LLC, 597 F.3d at 1245-46 (emphasis added); see also FAS Support Servs., LLC v. United States, 93 Fed. Cl. 687, 694 (2010) (ruling by the Honorable James F. Merow that the court possessed jurisdiction over an implied-in-fact contract to have bids fairly and honestly considered pursuant to 28 U.S.C. § 1491(a)(1) and noting the difference in relief available under section 1491(b)(1) (equitable) and section 1491(a)(1) (monetary, limited to the costs incurred in preparing the proposal and bid) (citing Keco Indus. Inc., 428 F.2d at 1240)); Creation Upgrades, Inc. v. United States, No. 09-788C, 2010 WL 1255684, at *1-2 (Fed. Cl. Mar. 24, 2010) (unpublished decision) (dismissing for lack of jurisdiction, in light of Resource Conservation Group, LLC, portions of the complaint that sought declaratory and injunctive relief related to the disposition of government property but construing the remaining allegations as within the framework of the government’s implied obligation to consider bids honestly and fairly under section 1491(a)(1)). In a recent decision, L-3 Communications Integrated Systems, L.P. v. United States, the Honorable Mary Ellen Coster Williams explained:

The [ADRA] . . . does not delete implied-in-fact or express procurement contracts from its reach. Section 1491(a)(1) continues to allow any plaintiff, including a disappointed bidder, to invoke this Court’s general contract jurisdiction to recover money damages, including bid preparation and proposal costs. The revision of [section] 1491(b) did not terminate the implied contract of fair dealing. Nor did a cause of action for breach of the implied cont[r]act of fair dealing under § 1491(a) cease to exist simply because a breach occurred in the context of a procurement decision and could also be denominated a “bid protest.”

94 Fed. Cl. 394, 397 (2010) (emphasis added).

The court agrees with Judges Merow and Williams. As noted above, the Federal Circuit concluded that the court’s implied-in-fact contract jurisdiction, which existed prior to the 1996 enactment of the ADRA, remains viable. In L-3 Communications Integrated Systems, L.P., Judge Williams explained that the Federal Circuit did “not hold that [the] ADRA eliminated [section] 1491(a) jurisdiction in a breach of implied contract action involving a procurement.” 94 Fed. Cl. at 398. Thus, while plaintiff cannot maintain her protest under section 1491(b), she may bring her protest under section 1491(a)(1), which confers upon the Court of Federal Claims jurisdiction over an implied-in-fact contract for the fair and honest consideration of a proposal with the AAFES. See 28 U.S.C. § 1491(a)(1); see also Am. Compl. ¶ 4 (alleging jurisdiction based, in part, upon 28 U.S.C. § 1491(a)(1)). Under section 1491(a)(1), plaintiff is precluded from obtaining equitable relief, which is only available for a section 1491(b)(1) protest, and is limited to a recovery of monetary damages that comprise the costs she incurred while preparing her proposal. See FAS Support Servs., LLC, 93 Fed. Cl. at 694 (citing Keco Indus., Inc., 428 F.2d at 1240). Accordingly, defendant’s motion to dismiss plaintiff’s bid protest claim for lack of jurisdiction pursuant to RCFC 12(b)(1) is denied.  (Joyce Terry, d/b/a Shirt Shack, v. U. S., No. 09-454C, December 15, 2010)  (pdf)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
U.S. Security Associates, Inc. v. U. S. and Securiguard, Inc., No. 15-1197C,  January 12, 2016  (pdf) Joyce Terry, d/b/a Shirt Shack, v. U. S., No. 09-454C, December 15, 2010  (pdf)
Resource Conservation Group, LLC v. United States, No. 08-768C, January 11, 2011 (pdf)  
Resource Conservation Group, LLC v. U. S. Department of the Navy, No. 08-768C, March 31, 2009)  (pdf)  

U. S. Court Appeals For The Federal Circuit - Key Excerpts

The Court of Federal Claims held that it lacked jurisdiction under 28 U.S.C.§1491(b)(1) to adjudicate bid protests involving leases of land where the government is the lessor, because such an action is not “in connection with a procurement or proposed procurement.” Res. Conservation Group, 86 Fed. Cl. at 486. The court also held that the enactment of 28 U.S.C.§1491(b) by the Administrative Dispute Resolution Act (“ADRA”), Pub.L. No. 104-320,§12, 110 Stat. 3870, 3874-76 (1996), had impliedly repealed the right to sue under an implied-in-fact contract pursuant to 28 U.S.C.§1491(a)(1), the general Tucker Act jurisdictional provision. Res. Conservation Group, 86 Fed. Cl. at 484-85. With respect to RCG’s APA claim, the Court of Federal Claims held that it lacked jurisdiction to review an agency decision under the APA (an issue not raised on appeal). Id. at 487. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

RCG argues that 28 U.S.C. § 1491(b) provides a jurisdictional basis for its claim. RCG alternatively argues that review of bid protests under the implied-in-fact contract of fair and honest consideration pursuant to 28 U.S.C.§1491(a) survived the enactment of the ADRA and that a breach of the implied-in-fact duty remains a viable theory of recovery. We review decisions of the Court of Federal Claims regarding subject matter jurisdiction de novo. See Taylor v. United States, 303 F.3d 1357, 1359 (Fed. Cir. 2002).

To assess these arguments, we begin by providing an overview of the legislative history of section 1491(b).

I

Under the Tucker Act, the Court of Federal Claims has jurisdiction “to render judgment upon any claim against the United States founded . . . upon any express or implied contract with the United States.” 28 U.S.C.§1491(a)(1). This jurisdictional grant was construed, prior to the enactment of the ADRA, to authorize suits by disappointed bidders challenging contract awards based on alleged improprieties in the procurement process. See Southfork Sys., Inc. v. United States, 141 F.3d 1124, 1132 (Fed. Cir. 1998) (citing Cent. Ark. Maint., Inc. v. United States, 68 F.3d 1338, 1341 (Fed Cir. 1995)). The jurisdictional basis for such suits was the alleged breach of “an implied contract to have the involved bids fairly and honestly considered.” Id. (quoting United States v. John C. Grimberg Co., 702 F.2d 1362, 1367 (Fed. Cir. 1983) (en banc)); see Heyer Prods. Co. v. United States, 140 F.Supp. 409, 414-15 (Ct. Cl. 1956).

Following passage of the APA in 1946, the District of Columbia Circuit in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that challenges to awards of government contracts were reviewable in federal district courts pursuant to the judicial review provisions of the APA. Id. at 869-75. Thus, for a period both the district courts and the Court of Claims exercised jurisdiction over bid protests on two separate theories. The legislative history of the ADRA indicates that the enactment § 1491(b)(1) was motivated by a concern with forum shopping and fragmentation of government contract law. As the original sponsor of the jurisdictional provision (Senator Cohen) stated, “It is my belief that having multiple judicial bodies review bid protests of Federal contracts has resulted in forum shopping as litigants search for the most favorable forum. Additionally, the resulting disparate bodies of law between the circuits has created a situation where there is no national uniformity in resolving these disputes.” See 142 Cong. Rec. S11848 (daily ed. Sept. 30, 1996) (statement of Sen. Cohen).

The ADRA expanded the jurisdiction of the Court of Federal Claims to hear bid protest cases, ultimately giving the court exclusive jurisdiction to review “the full range of procurement protest cases previously subject to review in the federal district courts and the Court of Federal Claims.” H.R. Rep. No. 104-841, at 10 (1996) (Conf. Rep.).8 The ADRA also directed the court to use the standards of review provided by the APA in reviewing the bid protest suits. 28 U.S.C. § 1491(b)(4).

With this background in mind, we turn to the arguments raised by the parties in this case.

II

We first consider whether RCG’s claim falls within the jurisdiction conferred by section 1491(b)(1), the new jurisdictional provision enacted by the ADRA. We conclude that the Court of Federal Claims correctly held that it does not.

Section 1491(b)(1) grants the Court of Federal Claims 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.

28 U.S.C. § 1491(b)(1) (emphasis added). Initially, we consider the meaning of the phrase “in connection with a procurement or a proposed procurement.”

In construing statutory language, we look to dictionary definitions published at the time that the statute was enacted. At the time that the ADRA was enacted in 1996, the definition of “procurement contract” was “[a] government contract with a manufacturer or supplier of goods or machinery or services under the terms of which a sale or service is made to the government.” Black’s Law Dictionary 1208 (6th ed. 1990). “Procure” was defined as “to get possession of; obtain, acquire.” Webster’s Third New International Dictionary 1809 (1993). These definitions of “procurement” and of “procure” signify the act of obtaining or acquiring something, in the context of acquiring goods or services. It strains the ordinary meaning of “procurement” to extend that definition to encompass a situation in which it is the government that is seeking to lease its own property.

Moreover, although Congress did not define “procurement” in the Tucker Act, it did define “procurement” in 41 U.S.C. § 403(2), related to the establishment of the Office of Federal Procurement Policy, an office within the Office of Management and Budget that plays a central role in shaping the policies and practices federal agencies use to acquire goods and services. Section 403(2) states 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) (emphasis added). In Distributed Solutions, Inc. v. United States, 539 F.3d 1340 (Fed. Cir. 2008), we concluded that the definition of “procurement” in 41 U.S.C. § 403(2) should be utilized in determining the scope of section 1491(b)(1), as the statutory provisions related to the establishment of the Office of Federal Procurement Policy “give overall direction for federal procurement policies, regulations, procedures, and forms.” 539 F.3d at 1345. The process involved in soliciting lessees for government-owned property cannot be characterized as a “process of acquiring property or services.” We note also that the GAO, in construing the “procurement” language, concluded that “[a] solicitation of offers to lease government-owned land is not a procurement of property or services by a federal agency; thus it is not encompassed within our [Competition in Contracting Act of 1984] bid protest authority.” Res. Conservation Group, B-310831 (Comp. Gen. Nov. 28, 2007).

Additionally, there is no indication in the legislative history that the ADRA was intended to deal with nonprocurement protests. Throughout the legislative history, section 1491(b)(1) is described as applying to “procurement.” See, e.g., 142 Cong. Rec. S6156 (daily ed. June 12, 1996) (statement of Sen. Cohen, original sponsor) (“[This] amendment is designed to increase the efficiency of our procurement system by consolidating jurisdiction over bid protest claims in the Court of Federal Claims.” (emphasis added)); H.R. Rep. No. 104-841, at 10 (“This section consolidates federal court jurisdiction for procurement protest cases in the Court of Federal Claims.” (emphasis added)); 142 Cong. Rec. S11849 (daily ed. Sep. 30, 1996) (statement of Sen. Levin) (“[T]he bill would address the . . . issue of judicial jurisdiction over procurement protests.” (emphasis added)). The issue of nonprocurement bid protests is mentioned nowhere in the legislative history.

The government agrees that the “procurement” language in the statute is limited to the procurement of goods and services. But in an apparent effort to support its argument discussed below that section 1491(b)(1) provides the exclusive remedy for both procurement and nonprocurement solicitations, the government argues that the procurement limitation only applies to challenges to “statutes and regulations” and not to challenges of “awards” and “solicitations.” It suggests that RCG could somehow secure relief if RCG were “to object to either the award or the solicitation. Those are not governed by ‘in connection with a procurement.’” Oral Arg. 13:23-13:30. This convoluted argument makes no sense, and is based entirely on the theory of the last antecedent, i.e., that the “procurement” language appears immediately after the “any violation of statute or regulation” language. See, e.g., Anhydrides & Chems, Inc. v. United States, 130 F.3d 1481, 1483 (Fed. Cir. 1997) (holding that referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent, which consists of “the last word, phrase, or clause that can be made an antecedent without impairing the meaning of the sentence”) (citations omitted). But we have made clear that that doctrine provides only marginal assistance, and is overcome by other factors showing a different meaning. Finisar Corp. v. DirecTV Group., Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008). Here it is clear, for the reasons described above, that 1491(b)(1) in its entirety is exclusively concerned with procurement solicitations and contracts. Moreover, it is quite unlikely that Congress would have allowed the Court of Federal Claims to exercise jurisdiction in nonprocurement bid protests in the case of a challenge to an award, proposed award, or solicitation, but not in the case of a challenge to a violation of a statute or regulation.

Thus, the Court of Federal Claims was correct in holding that relief under 1491(b)(1) is unavailable outside the procurement context.

III

We next address whether the implied-in-fact contract jurisdiction under 28 U.S.C. § 1491(a)(1) that existed prior to 1996 survived the enactment of the ADRA, a question that we had previously reserved in Emery Worldwide Airlines, 264 F.3d 1071, 1081 n.9 (Fed. Cir. 2001), and Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 n.6 (Fed. Cir. 2001). Contrary to the Court of Federal Claims, we conclude that implied-in-fact contract jurisdiction does survive as to claims where the new statute does not provide a remedy.

Before enactment of section 1491(b)(1), the Court of Federal Claims exercised jurisdiction over solicitations for the sale of government property, just as it did in the procurement area. The new statute on its face does not repeal the earlier jurisdiction. The government argues, however, that continuation of the implied-in-fact jurisdiction would be inconsistent with the purposes of the ADRA, which clearly was designed to place all bid protest challenges in a single court (after a sunset period) under a single standard (the APA standard).

We agree that Congress intended the 1491(b)(1) jurisdiction to be exclusive where 1491(b)(1) provided a remedy (in procurement cases). The legislative history makes clear that the ADRA was meant to unify bid protest law in one court under one standard. However, it seems quite unlikely that Congress would intend that statute to deny a pre-existing remedy without providing a remedy under the new statute. See, e.g., Davis v. Passman, 442 U.S. 228, 247 (1979) (holding that by enacting an amendment to the Civil Rights Act of 1964 which protects federal employees from discrimination, Congress did not intend to foreclose pre-existing alternative remedies available to those expressly unprotected by the statute). Indeed, the Conference Report to the ADRA provides:

It is the intention of the Managers to give the Court of Federal Claims exclusive jurisdiction over the full range of procurement protest cases previously subject to review in the federal district courts and the Court of Federal Claims. This section is not intended to affect the jurisdiction or standards applied by the Court of Federal Claims in any other area of law.

H.R. Rep. No. 104-841, at 10 (emphases added). This passage confirms that Congress did not intend to alter or restrict the Court of Federal Claims’ existing jurisdiction in cases not covered by the new statute. Similarly, the repeal of district court jurisdiction over bid protests in the ADRA made clear that the district court jurisdiction was repealed only where the new jurisdiction was substituted. Section 12(d) of the Act provided that “the jurisdiction of the district courts of the United States over the actions described in section 1491(b)(1) of title 28, United States Code . . . shall terminate on January 1, 2001 unless extended by Congress.” ADRA § 12(d), 110 Stat. at 3874-76.12 We conclude that the court’s implied-in-fact jurisdiction over nonprocurement solicitations survived the enactment of 1491(b)(1).

Admittedly, dividing jurisdiction between the Court of Federal Claims and the district courts for nonprocurement bid protests may lead to similar problems that led to the enactment of 1491(b)(1). However, if the statute is to be amended to solve this problem, that amendment must be undertaken by Congress and not this court.  (Resource Conservation Group, LLC vs. U. S., No. 09-5091, March 1, 2010)  (pdf)

U. S. Court Appeals For The Federal Circuit
For the Government For the Protester
Resource Conservation Group, LLC vs. U. S., No. 09-5091, March 1, 2010  (pdf)
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