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Roxco v. United States

U.S. Court of Appeals, Federal Circuit


March 19, 1999

ROXCO, LTD., PLAINTIFF-APPELLANT,
v.
UNITED STATES, DEFENDANT-APPELLEE.

Before Clevenger, Bryson, and Gajarsa, Circuit Judges.

The opinion of the court was delivered by: Bryson, Circuit Judge.

This is a bid protest case. The protester was previously awarded a contract identical to the one offered in the solicitation under protest. Although both the government and the protester contend that the previous award affects the outcome of this protest, we agree with the trial court that the bid protest action must be resolved without regard to the previous award, and we therefore affirm the judgment of the Court of Federal Claims.

BACKGROUND

In December 1996, the United States Navy solicited bids for the construction of bachelor enlisted quarters in New Orleans, Louisiana. The solicitation left the contractors substantial discretion in determining the design of the quarters and required only that the number of units be between 60 and 80. The solicitation also set forth criteria by which submitted proposals would be evaluated. Under the designated criteria, the technical aspects and the price of each proposal would be weighed equally.

The technical aspects included quality-of-life concerns, square footage, and project quality control. The price was assessed as the sum of the base price for the designed quarters, the estimated cost of changed work, a completion schedule adjustment, and the price of a required option of 12 additional units. The solicitation did not take into account the number of units in evaluating the price.

Three companies submitted proposals, including Roxco, Ltd., and Spartan Building Corporation. Roxco's proposed quarters included 62 units while Spartan's had 76. The Navy evaluated the proposals in view of the solicitation criteria. Roxco's proposal was deemed to have superior technical aspects and superior price. The Navy awarded the contract to Roxco in May 1997.

As part of the post-award process, the Navy revealed the details of Roxco's proposal to Spartan as well as the results of the Navy's evaluation of both proposals. With this information in hand, Spartan filed an agency-level protest contending that the solicitation was improper because it did not assess price on a per-unit basis. Spartan noted that it would have prevailed in the price competition if the base price used in the evaluation formula had been adjusted for the number of units included in each contractor's proposal.

The Navy agreed with Spartan that the solicitation contained flawed criteria. It therefore revised the criteria to take per-unit price into account and published a new solicitation on November 14, 1997. The second solicitation mirrored the first with the exception of the price evaluation formula. Although the Navy had not terminated the previously awarded contract at that time, Roxco promptly brought an action to enjoin the bid process. Subsequently, the Navy terminated Roxco's contract for the convenience of the government.

At a hearing on Roxco's request for an injunction, the government argued that the Court of Federal Claims lacked jurisdiction to entertain Roxco's action. Roxco responded that the court could grant relief under its bid protest jurisdiction. Specifically, Roxco requested that the court enjoin the second solicitation, enjoin an award of a contract to build the quarters to anyone other than Roxco, and declare Roxco's original contract to be valid and binding.

Following the hearing, the trial court rejected the government's jurisdictional challenge but ruled in favor of the government on the merits. The court then dismissed the complaint, and Roxco appealed.

DISCUSSION

"The bid protest portion of the Tucker Act provides as follows: Both the United States Court of Federal Claims and the district courts of the United States shall have 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 award or the award of a contract or any alleged violation of a statute or regulation in connection with a procurement or a proposed procurement." 28 U.S.C. § 1491(b)(1).

Roxco invokes that statutory provision in contending that it is entitled to protest the second solicitation by the Navy. The government responds that Roxco, as a contract awardee, is not an "interested party" within the meaning of the bid protest statute because Roxco's interests were not affected by the outcome of the solicitation. The government argues that if Roxco prevailed in the bid protest action, it would simply retain the same contract rights it already enjoyed, while if Roxco did not prevail, its rights under the previously awarded contract would not be altered. To be sure, if the termination of Roxco's contract is invalidated -- a matter not at issue in the bid protest action -- the second solicitation will be irrelevant to Roxco. But in assessing Roxco's interest in the second solicitation, the court cannot assume that the termination will be invalidated, and if the termination is not ultimately invalidated, Roxco would clearly be better off if its protest of the second solicitation were sustained. Roxco therefore qualifies as an "interested party" in the second solicitation because of the possibility that the second solicitation will determine who ultimately obtains a valid contract to build the project at issue.

The government next argues that Roxco's bid protest action is foreclosed because the Contract Disputes Act (CDA), 41 U.S.C. § 601 et seq., exclusively governs the relief sought by Roxco and Roxco had not met the jurisdictional prerequisites of the CDA at the time it filed suit. In making that argument, the government focuses on Roxco's request for relief in the form of a declaration that its existing award, under the first solicitation, was valid and binding. The government is correct that such a declaration could not be granted as relief in this bid protest action, because it does not concern the solicitation that is the subject of this lawsuit. Roxco, however, asked for other forms of relief that gave the trial court jurisdiction over Roxco's bid protest complaint. In particular, Roxco asked the trial court to enjoin the second solicitation, a form of relief that is entirely proper in a bid protest action.

The government does not dispute that an order invalidating the second solicitation is the kind of relief that could be granted in a bid protest action. It argues, however, that when the CDA aspect of a complaint is dominant, the court may not assume jurisdiction over those portions of the complaint that would otherwise arise under the court's bid protest jurisdiction. The government relies on Ingersoll-Rand Co. v. United States, 780 F.2d 74 (D.C. Cir. 1985), for that proposition.

In Ingersoll-Rand the government terminated a contract and resolicited bids for the same procurement. The terminated contractor filed an action in district court seeking an order invalidating both the termination and the resolicitation. The district court dismissed the complaint for lack of jurisdiction, holding that the Claims Court was the appropriate forum in which the contractor should seek relief. The court of appeals affirmed, concluding that the contractor's claims were essentially contract claims.

Ingersoll-Rand is not controlling here, for two reasons. First, that case involved the question whether the contractor's complaint should have been before the Claims Court rather than a district court. This case presents the quite different question whether an action properly filed in the Court of Federal Claims should be dismissed because some of the relief sought could be obtained only in an action under the Contract Disputes Act. Second, the contract in Ingersoll-Rand was terminated at the time of the resolicitation, and the court of appeals held that the contractor's complaints about the termination could (and should) have been brought under the CDA. In this case, by contrast, the government had not terminated Roxco's contract at the time the complaint was filed, and the option of suing under the CDA was therefore not open to Roxco at the time it filed its complaint. The fact that Roxco may now have a separate cause of action under the CDA does not deprive the Court of Federal Claims of jurisdiction over its cause of action under the bid protest provision of the Tucker Act.

On the merits of Roxco's bid protest claim, the trial court concluded that Roxco had not made the showing necessary for the court to exercise its injunctive powers. As the trial court correctly ruled, the initial award of the contract for constructing the bachelor quarters is not at issue in this bid protest case. Thus, Roxco's arguments that the government has not established adequate grounds for resoliciting the work already awarded are inapposite. While those arguments may be crucial to determining Roxco's rights under the construction contract that it was awarded, any such contract claims must await Roxco's appeal from the termination of its contract; they are not relevant to the present bid protest action. The trial court therefore properly declined to consider those arguments, and we decline to consider them as well.

We therefore do not consider Roxco's arguments that the government must honor a contract unless it makes a showing of impropriety, that a source selection official's award decision cannot be overruled by a successor contracting officer, and that the post-award reevaluation entity was improperly constituted. We do not reject Roxco's arguments on these points or suggest that they would fail if raised in an action challenging the termination of Roxco's contract. We merely hold that they do not provide a basis for attacking the second solicitation in a bid protest action.

Roxco does raise an objection to the second solicitation that is independent of the initial reward; Roxco argues that it was an impermissible auction in violation of 48 C.F.R. § 15.610(e) (1996). Although that regulation has been amended, see Federal Acquisition Circular, 62 Fed. Reg. 51,229, 51,230 (1997), the government does not argue that it is inapplicable to the solicitation at issue in this case. Under the cited regulation, "auction techniques" may be prohibited conduct to which administrative remedies apply. 48 C.F.R. § 15.610(e) (1996).

The government admits that it furnished information about Roxco's proposal to Spartan prior to soliciting further bids. The government argues, however, that a prohibited auction technique cannot be found where neither bidder gains an advantage. We reject the government's contention. Section 15.610(e) does not recite the government's proposed limitation, and both bidders may be disadvantaged vis-a-vis the government as a result of auction techniques.

In evaluating Roxco's "auction" argument, the trial court looked to LaBarge Products, Inc. v. West, 46 F.3d 1547 (Fed. Cir. 1995). In LaBarge this court concluded that allowing bids after revealing price information about previous bids did not constitute a prohibited auction if "the government has a rational or reasonable basis for doing so unrelated to the violation." 46 F.3d at 1555.

The trial court found that the government's reason for allowing bids after revealing price information was that the original solicitation criteria did not serve the best interest of the government. We agree with the trial court that the government's explanation for its conduct satisfies the LaBarge "rational or reasonable" test. The new criteria used in the second solicitation allow the government to evaluate contractors with a pricing formula that takes into account the number of units to be supplied. While the inclusion of square footage in the technical aspect of the original proposal might have addressed this concern to some extent, it was rational for the government to decide that it was in its best interest to consider that factor with respect to price. LaBarge does not impose a high standard on the government in avoiding the auction characterization. Because that standard has been met in this case, we affirm the judgment of the trial court.

19990319


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