Free Response - District Court of Federal Claims - federal

Case 1:07-cv-00280-LJB

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UNITED STATES COURT OF FEDERAL CLAIMS Bid Protest _________________________________ IRONCLAD/EEI, A Joint Venture, Plaintiff, v. UNITED STATES, Defendant, and CAMPBELL ROOFING & CONSTRUCTION, INC., MGC/CAMPBELL ROOFING & CONSTRUCTION, INC., Intervenor-Defendants. _________________________________ Case No: 07-280C (Judge Bush)

INTERVENORS' REPLY TO PLAINTIFF'S RESPONSE TO MOTIONS TO DISMISS AND TO MOTIONS FOR JUDGMENT ON THE ADMINISTRATIVE RECORD Dated: August 13, 2007
/s/ Herman C. Hoffmann, Jr. Herman C. Hoffman, Jr. Simon, Peragine, Smith & Redfearn, L.L.P. Attorneys for Plaintiff 1100 Poydras Street, 30th Floor New Orleans, Louisiana 70163-3000 Telephone: (504) 569-2030 Facsimile: (504) 252-3508

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UNITED STATES COURT OF FEDERAL CLAIMS Bid Protest _________________________________ IRONCLAD/EEI, A Joint Venture, Plaintiff, v. UNITED STATES, Defendant, and CAMPBELL ROOFING & CONSTRUCTION, INC., MGC/CAMPBELL ROOFING & CONSTRUCTION, INC., Intervenor-Defendants. _________________________________ Case No: 07-280C (Judge Bush)

INTERVENORS' REPLY TO PLAINTIFF'S RESPONSE TO MOTIONS TO DISMISS AND TO MOTIONS FOR JUDGMENT ON THE ADMINISTRATIVE RECORD

At the outset of this brief reply, it is important to note, as explained in this court's 8/7/07 Order, that, "[p]ut simply, the purpose of this bid protest review is, at bottom, to determine whether the contracting officer's decisions were arbitrary and capricious, an abuse of discretion, or otherwise

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contrary to law. 5 U.S.C. § 706(2)(A)(2000)1." It is also important to note, as also pointed out in this Court's 8/7/07 Order, "the fact that it is the exclusive province of the SBA, not the contracting agency, to render decisions on size status issues2." Taken together, these findings lead to the further conclusion that Intervenors' size status is not directly at issue in this litigation. This is made even more readily evident by this court's refusal of documents which plaintiff alleged would shed light on Intervenors' size status (albeit as of a time well after the date of Intervenors' self certification, which fact would have rendered the proposed documents irrelevant in any event.). As noted by this Court, documents which purport to be probative on the issue of "the size and contract eligibility of other awardees under the subject procurement3... shed no light on the agency's decision-making process... (and) do not serve to explain any complexities inherit in the procurement itself4." Based on this Court's explicit direction, Intervenors will forego any further argument related to the size status of any awardee under the subject procurement and will, instead, focus on Plaintiff's lack of standing and procedural inadequacies.

I.

PLAINTIFF IS NOT AN INTERESTED PARTY As is made abundantly clear by plaintiff's attempt to claim "interested party" status by use

of an abrogated standard noted in the case of American Fed'n of Gov't Employees, AFL-CIO v.

1

See this Court's 8/7/2007 Order at page 5. See this Court's 8/7/2007 Order at page 5. See this Court's 8/7/2007 Order at page 4. See this Court's 8/7/2007 Order at page 5.

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United States (AFGE), 46 Fed. Cl. 586, 595 (2000) (which is no longer good law on the point cited), plaintiff is not an interested party and, as such, lacks standing to initiate any protest related to the award of any 8(a) small business set-aside contract. More specifically, the language cited by Plaintiff, in it's attempt to claim "interested party" status for the purpose of proving that it has standing to bring the instant bid protest (which is its burden) was specifically overruled by the Court of Appeals for the Federal Circuit. In the case of American Fed. of Gov't Employees, AFL-CIO v. United States, 258 F.3d 1294, (Fed.Cir.2001) (American Federation Appeal ), the issue presented was "whether Congress intended to expand the class of parties who can bring bid protest actions in the Court of Federal Claims5." After a full review of the authorities and the legislative history relevant to the issue of standing, the Court of Appeals held that standing is limited to "actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract6." As is true with the Plaintiff in the instant matter, because the Appellants in that case were not actual or prospective bidders or offerors, they did not have standing to challenge the contract award. In the 2002 decision of Baltimore Gas and Electric Company v. United States, 290 F.3d 734 (4th Cir. 2002), the U.S. Court of Appeals for the Fourth Circuit, provided a review of the reasoning behind the decision in the American Federation Appeal. As explained by the following excerpt, Ironclad does not have standing to maintain the present action.
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American Federation Appeal at 1300. American Federation Appeal at 1302. (emphasis supplied). 3

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Only an "interested party" has standing under the ADRA to bring an action to challenge a bid solicitation by a federal agency. 28 U.S.C. § 1491(b)(1). ... The ADRA does not define "interested party," and until recently the scope of the term was not clear in the primary venue for ADRA bid protest cases, the Court of Federal Claims. In some cases that court had relied on the definition of "interested party" provided in the Competition in Contracting Act (CICA), 31 U.S.C. § 3551(2), which limits an interested party to "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract." See, e.g., Redland Genstar, Inc. v. United States, 39 Fed. Cl. 220, 230 n. 5 (1997) (looking to § 3551 for guidance in interpreting § 1491). In other cases the Court of Federal Claims had read the term "interested party" broadly to include any party that would have standing under the Administrative Procedure Act (APA) to challenge agency action. See, e.g., American Fed. of Gov't Employees, AFL-CIO v. United States, 46 Fed. Cl. 586, 595 (2000), aff'd on alternate grounds, 258 F.3d 1294 (Fed.Cir.2001); ATA Defense Indus. v. United States, 38 Fed. Cl. 489, 494 (1997) (suggesting broad reading in dicta). Last year, the United States Court of Appeals for the Federal Circuit resolved the issue, at least for the Federal Circuit, and held that an interested party under § 1491 is limited to an "actual or prospective bidder or offeror" as provided in CICA § 3551(2). American Fed. of Gov't Employees, AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed.Cir.2001) (American Federation ). ... The court began its analysis by recognizing that there are two plausible interpretations of the term "interested party." American Federation, 258 F.3d at 1299. The first interpretation is that the term encompasses any party who satisfies the APA's requirement for standing, specifically, "[a] person ... adversely affected or aggrieved by agency action." 5 U.S.C. § 702. The second (and more restrictive) interpretation is that "interested party" should be construed in accordance with the CICA, a statute that is related to the ADRA. The CICA defines "interested party" to mean "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract." 31 U.S.C. § 3551(2). Because "the plain language of [28 U.S.C. § 1491(b)(1)] does not resolve [the] issue" about the meaning of "interested party," the Federal Circuit "look[ed] to the legislative history of [the statute] for an indication of congressional intent." American Federation, 258 F.3d at 1299. The court explained that the legislative history of the ADRA "indicates that Congress intended [in 28 U.S.C. § 1491(b)(1)] to confer on the Court of Federal Claims jurisdiction previously exercised only by district courts under [Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970)]." Id. at 1300. Under Scanwell the district courts had exercised jurisdiction over both pre-award and post-award protests to 4

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federal bid solicitations and had used the APA standard of review. Id. Thus, the Federal Circuit reasoned that when Congress indicated through legislative history its intent to confer Scanwell jurisdiction on the Court of Federal Claims, Congress meant for the Court of Federal Claims to have jurisdiction over both pre- and post-award protests and to judge them under the APA standard of review. Indeed, the ADRA expressly provides that bid challenges are to be reviewed under the APA standard of review, see 28 U.S.C. § 1491(b)(4), the same standard applied under the district courts' Scanwell jurisdiction. What was less clear, the Federal Circuit explained, was whether Congress's reference to Scanwell implied that it "intended to expand the class of parties who can bring bid protest actions in the Court of Federal Claims." American Federation, 258 F.3d at 1300. (In pre-1997 cases the Court of Federal claims had only permitted disappointed bidders to bring suit. Id. at 1298.) On the one hand, because "[t]he vast majority of cases brought [in district courts] pursuant to Scanwell were brought by disappointed bidders," the court suggested that "Congress may have intended the [Court of Federal Claims] to exercise jurisdiction over disputes brought by disappointed bidders only." Id. at 1301. "On the other hand, because Scanwell itself is based on the APA, Congress could have intended to give the Court of Federal Claims jurisdiction over any contract dispute that could be brought under the APA. Because the language of 5 U.S.C. § 702 is quite broad [it refers to persons 'adversely affected or aggrieved by agency action'], parties other than actual or prospective bidders might be able to bring suit." Id. (footnote omitted). The court concluded that the former, more limited interpretation of the statute was preferable in light of the principle that "waivers of sovereign immunity, such as that set forth in § 1491(b)(1), are to be construed narrowly." Id. The court also observed that this more limited interpretation is consistent with statements in the legislative history that the ADRA would permit " 'a contractor [to] challenge a Federal contract award.' " Id. at 1301-02 (quoting 142 Cong. Rec. S11848 (daily ed. Sept. 30, 1996) (statement of Sen. Cohen) (emphasis added)). Finally, the Federal Circuit observed that while Congress does not spell out the meaning of the term "interested party" in the ADRA, Congress's use of that particular term does provide some guidance. Specifically, in drafting § 1491(b)(1), Congress did not adopt the APA's standing requirements by reference or use the broader standing language of the APA. Id. at 1302. Rather, Congress chose the term "interested party," the same term given a more limited definition in the CICA, 31 U.S.C. § 3551(2). According to the Federal Circuit, "the fact that Congress used the same term in § 1491(b) as it did in the CICA suggests that Congress intended the same standing requirements that apply to protests brought under the CICA to apply to actions brought under § 1491(b)(1)." Id. at 1302. In contrast, when Congress intended to import APA doctrines into the ADRA, it did so explicitly; specifically, when it came to providing for the standard of review in bid protest cases under the 5

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ADRA, Congress explicitly provided that the APA standard of review would apply instead of the more narrow standard of review that the Court of Federal Claims had employed prior to the ADRA. Id. at 1300, 1302. Congress's failure in the ADRA to explicitly invoke APA doctrines with respect to standing supports the inference that the APA standing test does not apply to the ADRA. The Federal Circuit's analysis is sufficiently persuasive for us to adopt it. We therefore "construe the term 'interested party' in § 1491(b)(1) in accordance with the CICA, and hold that standing under § 1491(b)(1) is limited to actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract." Id. at 13027. As previously argued by Intervenors and confirmed by The decision in the American Federation Appeal, to come within the Court of Federal Claims' bid protest jurisdiction, a plaintiff such as Ironclad is required to establish that it "(1) is an actual or prospective bidder, and (2) possesses the requisite direct economic interest8. Ironclad's attempted use of an abrogated standard has done nothing to carry its burden forward.

II.

THE AFFIDAVIT OF DANIEL EASTMON IS INSUFFICIENT TO PROVE ANY RELEVANT FACT. While the Affidavit of Daniel Eastmon was allowed "in order to afford plaintiff every

opportunity to present its case9", the affidavit itself is not sufficient to prove any relevant fact. What Mr. Eastmon attests to, after all, is his personal belief regarding the possible meaning of a statement

7

Baltimore Gas and Electric Company v. United States, 290 F.3d 734,737-739 (4 th Cir. 2002). (emphasis

supplied). Rex Service Corp., 448 F.3d at 1307. see also MCI Telecom's Corp v. U.S, 878 F.2d 362,364 (Fed. Cir. 1989). (emphasis supplied).
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See this Court's 8/7/2007 Order at page 6.

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which may have been made by a Contract Specialist to the sister of a perceived rival company, which statement was allegedly later described to Mr. Eastmon. Whatever the probative weight of this affidavit is, that weight is easily offset by the questions inherent in this suspect, second-hand and obviously self-serving information. The contents of the Eastmon Affidavit shed no light on the subject procurement and should, therefore, be considered minimis.

III.

IRONCLAD'S UNTIMELY LETTER TO THE CONTRACTING OFFICER DOES NOT TRANSFORM IRONCLAD INTO AN OFFEROR UNDER THE COMPETITIVE 8(A) CONTRACTS. Assuming, arguendo, that Plaintiff, timely initiated a size protest with the contracting officer,

which Intervenors do not, the contracting officer and/or the SBA would have been correct to ignore such a protest as Ironclad, a non-offeror, is not qualified to initiate such a protest. The Contracting Officer is simply not obligated to respond to the allegations of uninterested parties. For competitive 8(a) contracts, any offeror whom the contracting officer has not eliminated for reasons unrelated to size may make a size protest in connection with a particular procurement under the Small Business Set-Aside Program10. Ironclad does not claim to be qualified as an 8(a) business and has, during the course of these proceedings, admitted that it is not "small" for the purposes of the SBA's set-aside program. Ironclad was, in fact, not an actual offeror with respect to the 8(a) set-aside contracts and could not, even in theory, qualify as a prospective offeror. Ironclad, therefore, lacks standing to protest Intervenor's size, whether via letter to the Contracting Officer or by any other means.

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See 13 C.F.R. § 121.1001(a)(2)(I). (emphasis supplied).

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IV.

CONCLUSION Standing is a threshold jurisdictional issue that must be resolved before proceeding to the

merits of a case, and Ironclad bears the burden of establishing the elements of standing. In this case, Ironclad lacks standing because (1) it is not an actual or prospective bidder on contracts awarded to Intervenors, (2) it does not possesses the requisite direct economic interest to protest the award of any 8(a) small business contract, (3) it has failed to exhaust (and does not have standing to seek) an administrative remedy with respect to determination of the Intervenor's small business status, and Ironclad does not qualify as an "offeror" as is required to raise the issue of Intervenors' size. Because Ironclad lacks standing to bring its claim, Crown and Campbell respectfully aver that this claim must be dismissed with prejudice without further action by the court.

/s/ Herman C. Hoffmann, Jr. Herman C. Hoffman, Jr. Simon, Peragine, Smith & Redfearn, L.L.P. Attorneys for Plaintiff 1100 Poydras Street, 30th Floor New Orleans, Louisiana 70163-3000 Telephone: (504) 569-2030 Facsimile: (504) 252-3508

Certificate of Service I hereby certify that on this 13th day of August, 2007, a copy of the foregoing was filed electronically. I understand that notice of this filing will be sent to all parties by operstion of the Court's electronic filing system. Parties may access this filing through the Court's system. _____________________________

N :\D ATA \L\10882017\Pleadings\Intervenor's R eply to Plaintiff's R esponse to M otions.w pd

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