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LTMC/Dragonfly, Inc. v. Metropolitan Washington Airports Authority

March 30, 2010

LTMC/DRAGONFLY, INC., PLAINTIFF,
v.
METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiff LTMC/Dragonfly, Inc. ("LTMC"), doing business as District Cab Association, brings this action against Defendant Metropolitan Washington Airports Authority ("MWAA") protesting its nonselection for a taxicab concession at Washington Dulles International Airport. LTMC alleges that MWAA did not follow a fair and open process in awarding concession contracts and contends that its bid should have been among the three selected for a three-year contract. MWAA has moved to dismiss LTMC's Complaint for lack of subject matter jurisdiction, arguing that LTMC does not have standing and that the federal statute providing jurisdiction for suits against MWAA does not authorize bid protest actions such as this case. MWAA alternatively moves to dismiss on the ground that LTMC's Complaint is barred by the doctrine of laches because LTMC waited almost 19 months after losing its final administrative protest to bring this action. MWAA also moves to dismiss LTMC's claims for damages on the ground that damages are not an authorized remedy under the Enabling Act. After MWAA filed its [7] Motion to Dismiss, LTMC filed an opposition, and MWAA filed a reply. Having considered the parties' filings, the applicable authorities, and the record as a whole, the Court shall GRANT-IN-PART Defendant's Motion to Dismiss with respect to LTMC's claims for damages under the Enabling Act, DENY WITHOUT PREJUDICE-IN-PART with respect to the defense of laches, and DENY-IN-PART in all other respects.

I. BACKGROUND

A. Metropolitan Washington Airports Authority

The Metropolitan Washington Airports Authority is a regional entity created by the Virginia General Assembly and the District of Columbia City Council for the purposes of operating two federally owned airports, Washington Dulles International Airport ("Dulles") and Ronald Reagan Washington National Airport. The transfer of control of these airports from the federal government to MWAA was authorized by the Metropolitan Washington Airports Act of 1986 (the "Enabling Act"), Pub. L. No. 99-591, §§ 6001-12, 100 Stat. 3341-376 (1986) (codified as amended at 49 U.S.C. §§ 49101-112). The Enabling Act authorized the Secretary of Transportation to enter into a fifty-year lease (the "Lease") with MWAA for the operation of the airports. The Lease was executed on March 2, 1987, and control of the airports was transferred on June 7, 1987. Compl. ¶ 18.

The Enabling Act requires the Lease to include certain provisions governing MWAA's operation of the airports. See 49 U.S.C. § 49104. One of these provisions states that "[i]n acquiring by contract supplies or services for an amount estimated to be more than $200,000, or awarding concession contracts, the Airports Authority to the maximum extent practicable shall obtain complete and open competition through the use of published competitive procedures." Id. § 49104(a)(4). The Lease incorporates this language, stating that MWAA "shall obtain, to the maximum extent practicable, full and open competition through the use of published competitive procedures." Compl. ¶ 131 (quoting Lease § 11.D.) The Enabling Act also requires that MWAA's contracts be "awarded by procedures that follow sound Government contracting principles." See 49 U.S.C. § 49106(g). Another mandatory provision requires WMAA to develop a code of ethics and financial disclosure to ensure the integrity of decisions made by the board of directors and employees. 49 U.S.C. § 49104(a)(8). The Enabling Act prohibits members of the MWAA board and their families from having financial conflicts of interests with any enterprise that does business with MWAA. See id. § 49106(d).

In response to these requirements, MWAA developed a "Contracting Policies and Procedures Manual" (hereinafter, "Contracting Manual") and a "Code of Ethics." Compl. ¶ 21. The Contracting Manual sets forth MWAA's commitment to maximizing the competitive procurement process. Id. ¶ 22. The Contracting Manual provides that when competitive procedures are used for awarding contracts, the offers will be "evaluated and scored against predetermined evaluation criteria" and that MWAA will select the proposal with the greatest overall benefit in terms of the evaluation criteria. Id. ¶¶ 23-24. The Contracting Manual and the Code of Ethics both prohibit MWAA officials from having conflicts of interest with potential vendors. See id. ¶¶ 25-30.

The Enabling Act provides that "[t]he district courts of the United States shall have jurisdiction to compel the Airports Authority and its officers and employees to comply with the terms of the lease. An action may be brought on behalf of the United States by the Attorney General, or by any aggrieved party." See Enabling Act § 6005(e), 100 Stat. 3341-381.*fn1

B. The 2007 Taxicab Concession Contract

MWAA enters into a variety of revenue-generating concession contracts to provide goods and services to airport users. Compl. ¶ 20. MWAA regulations prohibit taxicab drivers from attempting to pick up passengers at Dulles unless the taxicab driver's company has a contract with MWAA. Id. ¶ 31. Around January 12, 2007, MWAA issued a request for proposals ("RFP") seeking proposals from taxicab companies for a contract to operate the taxicab concession at Dulles. Id. ¶ 32. The RFP informed prospective offerors that up to three contracts would be awarded and that each contract would be for an initial period of three years, with two one-year extension options. Id. ¶ 33. The contracts were to be awarded on or about June 1, 2007. Id. The RFP set forth certain criteria by which the contract proposals would be evaluated:

(1) Operations/Management Plan; (2) Financial Offer; (3) Industry Experience, Qualifications and Past Performance; and (4) Financial Ability to Perform. Id. ¶ 38. The RFP stated that Criterion 3 would be evaluated based on "depth of experience, qualifications, and past performance in taxicab or similar operations." Id. ¶ 40. Criterion 4 would be evaluated based on the offeror's "financial strength, financial resume, certified financial statements for the last two years, and other relevant financial information." Id. ¶ 41.

LTMC timely submitted a proposal in response to the RFP. Compl. ¶ 34. Prior to January 12, 2007, LTMC had been providing taxicab service at Dulles pursuant to a prior contract. Id. ¶ 36. LTMC also owned and operated a large fleet of taxicabs throughout the Washington, D.C., metropolitan area. Id. ¶ 37. LTMC asserts that its service at Dulles and throughout the region had been outstanding. Id. ¶¶ 36-37. A total of nine proposals for the taxicab concession RFP were submitted to MWAA. Id. ¶ 43. Among the other offerors was Dulles Airport Taxi, Inc. ("DAT"), a Northern Virginia taxicab company whose president was Farouq Massoud. Id. ¶ 44. According to LTMC, Massoud had previously operated taxicab service at Dulles through a company called Washington-Dulles Transportation ("WDT"), which was the subject of numerous complaints about the quality of service provided. Id. ¶¶ 45-46. Ultimately, Massoud and WDT were ousted from providing tax service at Dulles, and MWAA concluded that Massoud owed approximately $1.2 million in fees, but WDT sought bankruptcy protection and never paid the money to MWAA. Id. ¶¶ 47-49.

LTMC alleges that Massoud told others that he was assured of being selected as one of the winning bidders for the RFP because of information he had obtained from a lobbyist he hired to advocate in support of DAT's bid. Compl. ¶ 54. LTMC claims that the lobbyist in question was Brian Moran, an attorney who also served in the Virginia House of Delegates. Id. ¶¶ 55-56. At the time, Moran was contemplating a campaign for Governor or Lieutenant Governor of Virginia, and LTMC alleges that Moran hired Mame Reiley, then-Chairman of the MWAA Board of Directors, as a fundraising consultant. Id. ¶¶ 57-60. LTMC claims that Mame Reiley was hired by Moran's political campaign in April 2007, while the Dulles taxicab concession proposals were before MWAA for consideration. Compl. ¶ 64. Reiley voted in favor of DAT's proposal and did not recuse herself from the evaluation process or the vote on the award. Id. ¶¶ 62, 117. LTMC alleges that MWAA improperly evaluated DAT's proposal and failed to take into account Massoud's troubled history. See id. ¶¶ 71-73, 75-79.

MWAA pared down the list of offerors to six finalists, whose proposals were evaluated by MWAA's Technical Evaluation Committee. Compl. ¶¶ 74-75. The Committee recommended that taxicab concession contracts be awarded to DAT and two other companies (not LTMC) based on their evaluation of the four criteria in the RFP. Id. ¶ 80. LTMC claims that the Committee's evaluations were "completely divorced from any consideration of the actual facts relevant to Criteria 1, 3 and 4 and reflect a process that was arbitrary, capricious, irrational and/or tainted by a conflict of interests or other improper factor(s) rendering the evaluation process unfair . . . ." Id. In August 2007, the Committee's recommendation went to the MWAA Board of Directors. Id. ¶ 81. On August 10, 2007, MWAA sent LTMC a letter indicating that its proposal had not been selected. Id. ¶ 82. The rejection meant that LTMC would have to terminate its existing taxicab services at Dulles once the new contract began. Id. ¶ 83. MWAA personnel advised LTMC that its proposal had been rejected for reasons including the use of "less than ideal grammar" and a low financial offer. Id. ¶ 90. LTMC claims that these reasons were "specious and pretextual." Id. ¶ 91.

LTMC pursued all administrative protests and appeals provided for under the RFP and the Contracting Manual. Compl. ¶ 86. Specifically, LTMC alleged that the selection process and decision were unfair and inconsistent with the MWAA's obligation to provide for full and open competition, that MWAA had improperly evaluated LTMC's proposal by failing to consider LTMC's excellent past performance and failing to take into account LTMC's status as the only District of Columbia taxicab operator. Id. ¶ 92. LTMC's protest was denied by MWAA on August 20, 2007, and subsequent appeals were rejected on September 24, 2007, and November 14, 2007. Id. ¶¶ 93, 95, 105.

In its Complaint, LTMC alleges that MWAA violated the terms of the Lease by failing to follow its published competitive procedures for full and open competition. See Compl. ¶¶ 131-38. LTMC further alleges that MWAA's actions violated the substantive provisions of the Enabling Act and violated MWAA's implied duty to fairly and honestly consider the proposals submitted in response to the RFP. Id. ¶¶ 139-49. LTMC seeks a declaratory judgment declaring that MWAA's evaluation and decision-making process with respect to the taxicab concession contract violated the Lease and the Enabling Act, an injunction directing MWAA to terminate and cease further implementation of the contract and to either award LTMC a contract, reevaluate the proposals originally submitted, or re-issue an RFP for the taxicab concession. Id. ¶ 138. In addition, LTMC seeks an award of damages for costs and other damages, including lost profits, sustained as a result of MWAA's conduct. Id.

II. LEGAL STANDARD

A. Motion to Dismiss for Lack of Subject Matter Jurisdiction ...


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