Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

Case 1:08-cv-00038-LAS

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS (BID PROTEST) WASHINGTON GROUP INT'L, INC., INTERBETON, INC. - JV Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) )

No. 08-38C (Senior Judge Smith)

DEFENDANT'S MOTION TO DISMISS Pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of this Court ("RCFC"), defendant, the United States, respectfully requests that this Court dismiss the complaint filed by plaintiff Washington Group International, Inc., Interbeton, Inc. - JV ("Washington Group") because its challenge to the actions of the United States Army Corps of Engineers ("Corps") has been rendered moot in light of remedial action taken by the Corps. In support of this motion, we rely upon the following brief. DEFENDANT'S BRIEF STATEMENT OF THE ISSUE Whether the complaint filed by Washington Group should be dismissed because the requested relief contained therein is now moot. STATEMENT OF THE CASE I. Nature Of The Case Washington Group challenges the Corps' determination that the Washington Group's January 7, 2008 submission in response to Solicitation No. W912P8-07-R00053 (the

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"Solicitation") was ineligible for award of the subject contract, and the Contracting Officer's January 16, 2007 decision denying all indemnification requests made by offerors against thirdparty liability arising out of work performed on the contract. See Complaint for Temporary Restraining Order, Preliminary and Permanent Injunctive Relief, and Declaratory Judgment, dated January 17, 2008 ("Compl."). On July 2, 2007, the Corps issued the Solicitation for the "Improvement of Hurricane Protection of the Inner Harbor Navigational Canal" in New Orleans, Louisiana. The Solicitation separated the procurement into two phases. In Phase I, the Corps issued a request for qualifications ("RFQ"). On August 17, 2007, the Corps selected from the initial respondents to the RFQ those offerors it considered most qualified to submit formal proposals as part of Phase II of the procurement. Washington Group was among the offerors selected to submit a Phase II proposal. Phase II proposals were to be submitted to the Corps no later than January 7, 2008. Phase II also contemplated oral presentations by the remaining offerors based upon their submitted proposals. In light of questions from offerors with regards to indemnification, on October 3, 2007, the Corps issued Amendment 004 to the Solicitation, inviting the remaining offerors to submit requests for indemnification in accordance with FAR part 50. The remaining offerors submitted formal indemnification requests in response to the amendment. After considering those submissions, the Corps requested additional information with regards to the requests. The remaining offerors submitted additional information in response to the Corps' request. The Corps issued four additional amendments to the Solicitation after the issuance of Amendment

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004, each of which stated that indemnification had not been approved, and that the Corps reserved the right to modify the terms of the solicitation in the event that it was. On January 7, 2008, Washington Group submitted its Phase II proposal in response to the Solicitation. Washington Group expressly conditioned its proposal upon the receipt of indemnification prior to the start of construction for what it deemed to be "uninsurable risk." As a result of this condition, the Corps determined that Washington Group's proposal was unacceptable and ineligible for award, and so notified Washington Group orally on January 12, 2008, and in writing on January 14, 2008. On January 16, 2008, the Contracting Officer notified each offeror in writing that all requests for indemnification had been denied. Washington Group filed its Complaint on January 17, 2008, requesting the following relief: (1) a temporary restraining order enjoining the Corps from considering Phase II proposals without including Washington Group's January 7, 2008 submission; (2) a temporary restraining order enjoining the Corps from making a source selection and subsequent award of the subject contract under the Solicitation without also considering and "appropriately evaluating" Washington Group's Phase II submission; (3) an order directing the Contracting Officer to allow Washington Group to assemble its team and make its Phase II oral presentation within a "reasonable proximity of time to the oral presentations of the other offerors"; (4) a declaratory judgment from the Court that the Corps' determination that Washington Group's Phase II proposal was ineligible for award was improper and reimbursement for costs incurred to reassemble its team and make its Phase II oral presentation; (5) a declaratory judgment that the Corps' January 14, 2008 determination was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with applicable statutes and regulations; (6) a preliminary and 3

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permanent injunction preventing the Contracting Officer from denying Washington Group's request for indemnification under the terms of FAR Part 50 without first determining that a "higher level approving authority" would deny the request; (7) a preliminary and permanent injunction directing the agency that it may not proceed with the procurement unless Washington Group's Phase II proposal is considered and Washington Group is given fair consideration for award as part of the source selection process; (8) proposal preparation costs; and (9) any other relief the Court deems appropriate. See Compl. at "Prayer for Relief." During the pendency of this protest, the Corps initiated remedial action. In light of this action, Washington Group's protest should be dismissed in its entirety as moot. II. Remedial Action Soon after Washington Group filed its Complaint, the parties, through counsel, entered into settlement discussions. As of January 24, 2008, the Government understood that the parties had reached a settlement in principle, and defendant's counsel notified the Court that he had recommended that the appropriate authority within the Department of Justice approve a compromise of this action based upon the terms agreed between plaintiff's counsel and defendant's counsel. See "Defendant's Unopposed Motion of Time In Which To File The Administrative Record," dated January 24, 2008, at p. 1 ("The Government requests this extension because the parties have been negotiating in good faith and have reached a tentative settlement in this litigation. That settlement has been recommended for approval to the appropriate authority within the Department of Justice."). That proposed settlement was approved by the authorized representative of the Attorney General on January 25, 2008. On January 28, 2008, plaintiff's counsel notified counsel for the defendant that the Washington 4

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Group could not agree to one of the terms of the proposed settlement, notwithstanding the Government's understanding that the parties had reached an agreement in principle as of January 24, 2008. Despite the representation of Washington Group's counsel on January 28, 2008 that it could not agree to the terms of the proposed settlement, the Corps voluntarily took the remedial action that was originally contemplated as part of that settlement - readmitting Washington Group into the competition, allowing it to make its Phase II oral presentation on January 29, 2008, evaluating the proposal as submitted, and issuing an amendment to the Solicitation on that same date allowing all offerors to modify their written Phase II proposals in light of the Contracting Officer's January 16, 2008 decision regarding indemnification. See January 24, 2008 emails between Missy Arnold, Contracting Officer, and Steven E. Richards, Senior Vice President, Business Development, Infrastructure Business Unit, Washington Division of URS Corp. (attached as Ex. A); Amendment No. 10 (attached as Ex. B); January 29, 2008 email from Missy Arnold to Steven E. Richards confirming Washington Group's readmittance into competition (attached as Ex. C). Washington Group made its Phase II oral presentation to the Corps in New Orleans on the morning of January 29, 2008. In taking this voluntary remedial action, the Corps has not admitted or conceded the validity of any portion of Washington Group's complaint. ARGUMENT I. Standard Of Review According to the plain language of the Tucker Act, this Court may award declaratory or injunctive relief to a party objecting to a "solicitation," a "proposed award" or "the award of a 5

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contract." 28 U.S.C. § 1491(b)(1) & (2). However, "federal courts do not sit to render advisory opinions." Fina Oil & Chemical Co. v. Ewen, 123 F.3d 1466, 1470 (Fed. Cir. 1997). As a result, even where declaratory relief is sought, "an actual controversy between the parties" is required "before a federal court may exercise jurisdiction." Id. (explaining that declaratory relief is available "only when the situation has progressed to an actual controversy, as required by Article III of the Constitution"). The Corps' remedial action has eliminated the controversy in this matter. It is wellsettled that the Court may not substitute its judgment for that of the agency. See IMS Servs., Inc. v. United States, 33 Fed. Cl. 167, 179 (1995); see also Baird Corp. v. United States, 1 Cl. Ct. 662, 664 (1983) ("The Court should not substitute its judgment on such matters for that of the agency, but should intervene only when it is clearly determined that the agency's determinations were irrational or unreasonable."). Accord Prineville, 859 F.2d at 909; National Forge Co. v. United States, 779 F.2d 665, 667 (Fed. Cir. 1985); CACI Field Serv., 13 Cl. Ct. at 725; Arrowhead Metals, Ltd. v. United States, 8 Cl. Ct. 703, 711 (1985). Further, "[c]ontracting officers may properly exercise wide discretion in their evaluation of bids and in their application of procurement regulations." CACI Field Serv., 13 Cl. Ct. at 725. Accord NKF Eng'g, 805 F.2d at 377 n.7. "While contracting officers may not act illegally, they are entitled to exercise discretion upon a broad range of issues confronting them, including `consideration of price, judgment, skill, ability, capacity, and integrity' in the solicitation of business with whom the [G]overnment will enter into contracts." Keene Corp. v. United States, 584 F. Supp. 1394, 1401 (D. Del. 1984) (quoting Kinnett Diaries, Inc. v. Farrow, 580 F.2d 1260, 1277 (5th Cir. 1978)). 6

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In negotiated procurements, contracting officers "have broad discretion to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition." Mantech Telecommunications and Information Sys. Corp. v. United States, 49 Fed. Cl. 57, 65 (2001) (quoting DGS Contract Serv., Inc. v. United States, 43 Fed. Cl. 227, 238 (1999)), aff'd, 30 Fed. Appx. 995, 2002 WL 418169 (Fed. Cir. 2002) (table). Both "this Court and the Comptroller General have indicated that they will not object to an agency's proposed corrective action provided it is `reasonable under the circumstances,' DGS Constract Serv., Inc., 43 Fed. Cl. at 238, and `appropriate to remedy the impropriety,' Rockville Mailing Serv., Inc., 96-1 CPD ¶ 184, at 3." Mantech, 49 Fed. Cl. at 65. Moreover, although there can be no question here, based upon the fact that Washington Group has already been allowed to make its Phase II oral presentation and the Corps has already issued the amendment to the solicitation allowing offerors to modify their proposals in light of the Contracting Officer's indemnification decision, this Court must assume that the Corps has and will carry out the remedial action in good faith. See T&M Distributors, Inc. v. United States, 185 F.3d 1279, 1285 (Fed. Cir. 1999) ("[G]overnment officials are presumed to act in good faith, and `it requires "well-nigh irrefragable proof" to induce a court to abandon the presumption of good faith.'") (citing Kalvar Corp. v. United States, 211 Ct. Cl. 192, 543 F.2d 1298, 1301-02 (1976), cert. denied, 434 U.S. 830 (1977)). To overcome the presumption of good faith, a plaintiff must "present `clear and strong proof of specific acts of bad faith,' demonstrating that a Government official acted with malice or a specific intent to injure the plaintiff." Morris v. United States, 39 Fed. Cl. 7, 15 (1997) (quoting Morris v. United States, 33 Fed. Cl. 733, 752 (1995) (citing Torncello v. United States, 681 F.2d 756, 771, 231 Ct. Cl. 20 (1982)). 7

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II.

Washington Group's Complaint Should Be Dismissed as Moot A case is moot if (1) "it can be said with assurance that there is no reasonable expectation

that the alleged violation will recur;" and (2) "interim relief or events have completely and irrevocably eradicated the effects of the alleged violation." Chapman Law Firm, 490 F.3d at 940 (citations omitted). In the context of a bid protest, if the "revised corrective action adequately addresse[s] the effects of the challenged action, and the Court of Federal Claims ha[s] no reasonable expectation that the action w[ill] recur," the Court should dismiss the case. Id. The Corps has readmitted Washington Group to the competition for the Solicitation; has received Washington Group's oral presentation as part of its Phase II proposal; has issued an amendment to the Solicitation allowing Washington Group (along with each of the remaining short-listed offerors) to modify its proposal in light of the Contracting Officer's indemnification decision; and will give full consideration to any modification Washington Group makes to its Phase II proposal in light of the most recent amendment. This remedial action with regards to the solicitation is reasonable, adequately addresses the relief requested in the Complaint, and renders each of the following requests of Washington Group moot: (1) its request for a temporary restraining order preventing the Corps from evaluating Phase II proposals without also considering Washington Group's Phase II proposal; (2) its request for a temporary restraining order preventing the Corps from making a source selection and proceeding with the award of a contract under the solicitation prior to evaluating Washington Group's Phase II proposal; (3) its request for an order directing the Contracting Officer to allow Washington Group to make its Phase II oral presentation; (4) its request for a declaratory judgment that, if the Court determines that the Corps' rejection of Washington Group's Phase 8

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II proposal was improper, Washington Group should be reimbursed for expenses to reassemble the team necessary to make its oral presentation; (5) its request for a declaratory judgment that the Corps' elimination of Washington Group's Phase II proposal was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with applicable statutes and regulations; (6) its request for injunctive relief preventing the Contracting Officer from denying Washington Group's request for indemnification without first obtaining a determination whether that request would be denied by a "higher level authority"1; (7) its request for injunctive relief preventing the Corps from proceeding with the procurement without first reinstating and fairly considering Washington Group's Phase II proposal; (8) its request for proposal preparation costs in light of the Corp's alleged breach of its implied duty to treat Washington Group's proposal fairly. These requests have all been rendered moot by the Corps' remedial action that 1) allows Washington Group to make its Phase II oral presentation (which it did on the morning of January 29, 2008) and its proposal to be considered with the proposals of the other remaining offerors; and 2) allows each offeror to revise its original proposal in light of the Contracting Officer's January 16, 2008 decision regarding indemnification.

The applicable language of Federal Acquisition Regulations governing requests for indemnification does not require that the denial of such requests be considered by a "higher level authority" than the Contracting Officer. See 48 C.F.R. 50.104-3(b)(1) ("The contracting officer, with assistance from legal counsel and cognizant program office personnel, shall review the indemnification request and ascertain whether it contains all required information. If the contracting officer, after considering the facts and evidence, denies the request, the contract officer shall notify the contractor promptly of the denial and of the reasons for it. If recommending approval, the contracting officer shall forward the request . . . through channels to the appropriate official specified in 50.102-1(d).") 9

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As a result of these actions, the Washington Group's Phase II proposal will be fairly considered with those of the other offerors to the Solicitation. Moreover, the Corps' action not only allowed Washington Group to make its Phase II oral presentation, but the amendment to the Solicitation also affords Washington Group the opportunity to remove the condition of indemnification that rendered its original proposal inconsistent with the terms of the Solicitation, so as to be eligible for award of the subject contract. As such there is no longer a controversy between the parties on these issues. The Corps' remedial action has "completely and irrevocably eradicated the effects of the alleged violation." Chapman Law Firm, 490 F.3d at 940. Therefore, Washington Group's Complaint should be dismissed in its entirety as moot. See Deakins v. Monaghan, 484 U.S. 193, 201 n.5 (1988) (no jurisdiction if case moot); Rice Serv., Ltd. v. United States, 405 F.3d 1017 (Fed. Cir. 2005) (finding that the case had become "essentially moot" because "the relief requested by [Rice] has, substantially, been voluntarily afforded by the Navy"); Chapman Law Firm, 490 F.3d at 939-40 (finding that the questions originally in controversy between the parties were no longer at issue after the United States Department of Housing and Urban Development decided to take reasonable corrective action). CONCLUSION For the foregoing reasons, defendant respectfully requests that this Court grant its motion to dismiss and dismiss Washington Group's complaint in its entirety.

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Respectfully submitted,

JEFFREY S. BUCHOLTZ Acting Assistant Attorney General JEANNE E. DAVIDSON Director s/ Donald E. Kinner DONALD E. KINNER Assistant Director s/ Anuj Vohra ANUJ VOHRA Trial Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, NW Attention Classification Unit, 8th Floor Washington, DC 20530 (202) 353-0521 January 29, 2008 Attorneys for the United States

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CERTIFICATE OF SERVICE I hereby certify that on January 29, 2008, this document was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. s/Anuj Vohra

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