Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

National Mall Tours of Washington, Inc. v. United States Department of Interior

United States District Court, District of Columbia

March 18, 2016




Plaintiff National Mall Tours of Washington, Inc. ("National Mall Tours") has brought this action against the United States Department of the Interior, Secretary of the Interior Sally Jewell, the National Park Service ("Park Service"), and Director of the Park Service Jonathan Jarvis, challenging the Park Service's award of a concession contract for guided bus tour services in Washington, D.C. Compl. [Dkt. # 1]. Plaintiff alleges that there was a change in the controlling interest of the awardee. City Sightseeing Washington D.C, Inc., d/b/a Big Bus Tours ("Big Bus Tours"), after the proposals had been submitted but before the award was finalized. Id. ¶2. According to plaintiff, this rendered the Big Bus Tours proposal invalid, and since the Park Service failed to give adequate consideration to the change, the award to Big Bus Tours was improper. Id. ¶ 3. Plaintiff also asserts that the Park Service failed to comply with its statutory obligation to submit a contract with anticipated gross receipts over $5 million to Congress for a period of sixty days before awarding the contract. Id. ¶ 4. Plaintiff asks the Court to declare the contract award invalid and to direct the Park Service to redo the solicitation. Id., Prayer for Relief, at 27-28.[1]

Plaintiff endeavors to create the impression that there has been a recent, nefarious foreign takeover of the tour operator for the nation's capital. It contends that the Park Service failed to give due consideration to this change in ownership, which in plaintiffs view, should have barred Big Bus Tours from receiving the contract. Compl. ¶¶ 2-3 (asserting that Big Bus Tours "had been purchased by a foreign-owned corporation . . . and therefore its controlling interest had changed, " and that the Park Service "had the legal authority to review this change in ownership . . . but failed to do so"); id. ¶ 50 ("[T]he intended awardee was purchased by Exponent Private Equity."); id. ¶51 ("National Mall Tours is unaware of why the intended awardee would agree to be taken over by a new owner."). But that is simply not what took place. Throughout the entire contract award process, Big Bus Tours was a wholly-owned subsidiary of Open Top Sightseeing USA ("Open Top Sightseeing"), a U.S. company, which has always been a wholly-owned subsidiary of Big Bus Tours Limited, a U.K. company. So what this case turned out to be about is whether the award should be invalidated because between the time Big Bus Tours submitted its proposal and the time the Park Service reached its decision, a U.K. private equity firm acquired an ownership stake in Big Bus Tours Limited, the U.K.-owned grandparent company of Big Bus Tours, or because the Park Service failed to submit the contract to Congress and wait sixty days before awarding it.

This case is not only marred by a gap between the facts and the rhetoric; it is also a case in search of a theory. While plaintiff has advanced different legal theories in its complaint, its motion for summary judgment, and at oral argument, it has yet to supply the Court with any legal basis for overturning the contract award under the APA. Because the Court finds that the certifications made by Big Bus Tours in its proposal concerning its ownership were not invalidated by the change in the grandparent company's ownership, and because the Park Service properly considered this information in any event, it will not invalidate the award on that basis. The Court also finds that it was not unreasonable for the Park Service to determine that it could only anticipate annual gross receipts based on the services required under the contract, and that the anticipated amount was below the threshold at which Congressional notification was required. Therefore, plaintiffs motion for summary judgment will be denied, and defendant's cross-motion for summary judgment will be granted.


I. Factual Background

This case arises out of a National Park Service solicitation for a ten-year concession contract to provide "interpretive transportation services" - guided bus tours - for visitors to the National Mall and other landmarks in Washington, D.C. Administrative Record ("AR")[2] 3105- 559 ("Prospectus"). These services had been previously provided by Big Bus Tours under a contract that was due to expire on March 31, 2015. AR 1041; AR 3136. The Park Service issued the Prospectus for the new contract on October 23, 2014, and it called for all proposals to be submitted by December 12, 2014. AR 3107.

The Prospectus set forth five statutorily-mandated Principal Selection Factors upon which proposals would be evaluated:

Principal Selection Factor 1. The responsiveness of the proposal to the objectives, as described in the Prospectus, of protecting, conserving, and preserving resources of the park[;]
Principal Selection Factor 2. The responsiveness of the proposal to the objectives, as described in the Prospectus, of providing necessary and appropriate visitor services at reasonable rates;
Principal Selection Factor 3. The experience and related background of the Offeror, including the past performance and expertise of the Offeror in providing the same or similar visitor services as those to be provided under the new concession contract;
Principal Selection Factor 4. The financial capability of the Offeror to carry out its proposal; and
Principal Selection Factor 5. The amount of the proposed minimum franchise fee and other forms of financial consideration to the Service. . . .

AR 3113; see also 54 U.S.C. § 101913(5)(A); 36 C.F.R. § 51.17(a). The Prospectus also identified a Secondary Selection Factor: "[t]he quality of the Offeror's proposal to conduct its operations in a manner that furthers the protection, conservation, and preservation of the park and other resources through environmental management programs and activities, including, without limitation, energy conservation, waste reduction, and recycling." AR 3113; see also 54 U.S.C. § 101913(5)(B); 36 C.F.R. § 51.17(b). Finally, the Prospectus required any offeror to submit a transmittal letter certifying that the information provided in its proposal was "complete, true, and correct, " including any representations regarding "individuals or entities acting as Offeror or with an ownership interest in the Offeror." AR 3118.

The Prospectus noted that "[concession contracts issued for a term of more than ten years, or when the annual gross receipts are anticipated to exceed $5, 000, 000, are required by law to be submitted to the Congress for sixty days before they may be awarded." AR 3114. Because the Park Service determined that the contract at issue did not meet those requirements, it advised offerors that "[t]he new concession contract will not be submitted to the Congress." AR 3114.

Three companies submitted proposals in response to the Prospectus: Big Bus Tours, City Sights DC, and National Mall Tours, the plaintiff in this action. AR 1037-230 (Big Bus Tours); AR 1292-379 (City Sights DC); AR 1380-767 (National Mall Tours). In response to Principal Selection Factor 3, Big Bus Tours, the eventual awardee, stated that it "is fully responsible for all aspects of operations" in Washington, D.C., "including Vehicle Maintenance and Operations, Sales & Marketing, Finance, Training, Safety, and Human Resources." AR 1063.[3] It also explained that Big Bus Tours "is a wholly owned subsidiary of Open Top Sightseeing USA, which in turn is a wholly owned subsidiary of Big Bus Tours Limited, " based in London. AR 1061. It characterized Big Bus Tours Limited as "a major international company, operating on three continents, " and it further clarified that "[n]o individual or Entity owns greater than 25% of Big Bus Tours Ltd." AR 1059. Big Bus Tours also included a business organization form for itself and for Open Top Sightseeing, and it stated that "[h]igh level management support of the local operation" and "[f]unding, as needed, " is provided by both Open Top Sightseeing and Big Bus Tours Limited. AR 1060-61.

From December 15, 2014 through December 19, 2014, and again on January 21, 2015, a Park Service evaluation panel convened to review the three proposals based on the criteria set forth in the Prospectus. AR 1775-814.[4] The panel "consisted of one voting chair, eight voting [Park] Service employees, and three technical advisors from the Park, the Region and a contractor." AR 1776. Based on the five Principal Selection Factors and the Secondary Selection Factor, the panel gave Big Bus Tours the highest score of 20.0 points, with City Sights DC and National Mall Tours receiving 17.0 and 16.5 points, respectively. AR 1777. The panel ultimately recommended that the Big Bus Tours proposal be found responsive and that Big Bus Tours receive the contract. AR 1815. On February 16, 2015, Steve LeBel, the Park Service's Deputy Associate Regional Director, transmitted this recommendation to Robert Vogel, the Park Service's Regional Director, who approved it on March 15, 2015. AR 1816. On March 23, 2015, the Park Service sent Big Bus Tours a letter indicating that on March 16, 2015, two copies of the concession contract had been provided to Rich Goldstein, the company's General Manager, for his signature. AR 3059.

On March 19, 2015, plaintiffs CEO contacted Deputy Associate Regional Director LeBel by email and asked whether he was aware that, as he put it, "Big Bus was sold in February of this year." AR 3046. On March 26, 2015, plaintiffs counsel sent a more-detailed letter to LeBel, asserting that "as of February 2015, Exponent Private Equity LLP, a foreign entity, took over control of Big Bus Tours." AR 3560-62 ("Garden Letter").[5] Since the proposals had been submitted in December 2014 and the acquisition did not occur until February 2015, plaintiffs lawyer opined that Big Bus Tours could not have included information about the acquisition in its submission and it could not have been reviewed by the panel. Garden Letter, AR 3561-62. He advanced plaintiffs position that the Park Service was "legally precluded from proceeding with any award of the contract at issue to Big Bus Tours, " since the evaluation panel had not properly considered this new information. Garden Letter, AR 3561-62.

That same day, LeBel forwarded the letter to Debra Hecox, the Park Service's Branch Chief for Planning and Development, and they discussed the implications of the potential ownership change. AR 3069. On March 27, 2015, Liz Tinker, a Park Service Concessions Management Specialist, contacted Big Bus Tours and requested that it "resubmit" the portions of its contract proposal addressing Principal Selection Factors 3 and 4 "with the new ownership information, " and that it "provide a narrative or a revised proposal signifying all the references of the previous ownership replaced by the new ownership." AR 3086.

Big Bus Tours responded the next day, representing that "[o]n March 19, 2015 Exponent Private Equity made an investment in Big Bus Ltd., " and that this change "in no way affects the tender submitted with no change in control or ownership structure of [its] U.S. operations." AR 1845. Big Bus Tours stated that the change had no effect on Principal Selection Factors 3 and 4, and it explained that the Big Bus Tours corporate structure remained the same as it had been described in the contract proposal: "City Sightseeing Washington DC, Inc. dba Big Bus Washington DC remains a wholly owned subsidiary of Open Top Sightseeing USA, which in turn is a wholly owned subsidiary of Big Bus Tours Limited." AR 1845-16. It added that "Big Bus Tours Limited is beneficially owned by Exponent Private Equity Partners III LP." AR 1846. Finally, it represented that there was no change in the offeror's "financial capacity to carry out our proposal as submitted" or in the "Investment, Income and Cash Flow schedules as originally supplied" in response to the Prospectus. AR 1846.

On March 30, 2015, Tinker reviewed the response and informed Hecox and other Park Service staff that she saw nothing in the letter "that changes the organizational structure or the offeror guarantor." AR 3088. Hecox instructed Tinker to proceed with obtaining the Regional Director's signature on the Big Bus Tours contract, AR 3088, and the final signed contract was transmitted to Big Bus Tours later that day. AR 3090; see also AR 1847-902 (final signed contract).

II. Procedural History

Plaintiff initiated this action on April 10, 2015, Compl., and three days later, it moved for a preliminary injunction, asking the Court to order the Park Service to suspend operations under the newly-awarded contract. Pl.'s Mot. for Prelim. Inj. [Dkt. #4]. On April 15, 2015, the parties filed a joint stipulation advising the Court that, in response to plaintiffs concerns that it might be prejudiced by further operations by Big Bus Tours under the contested contract, the Park Service had suggested to Big Bus Tours that it "not make any significant investments related to its contractual operations until the pending motion for a preliminary injunction is resolved." Joint Stipulation & Proposed Briefing Schedule [Dkt. # 13] at 1.

At a status conference held on April 16, 2015, the Court consolidated plaintiff s motion for a preliminary injunction with the merits pursuant to Federal Rule of Civil Procedure 65, and it established a schedule for the submission of cross-motions for summary judgment. Min. Entry (Apr. 16, 2015); Min. Order (Apr. 17, 2015). One month later, Big Bus Tours moved to intervene in this action, Mot. & Mem. of P. & A. in Supp. of Mot. to Intervene [Dkt. # 19], and the Court granted its request. Min. Order (May 18, 2015).

On July 16, 2015, plaintiff filed its motion for summary judgment. Pl.'s Mot. for Summ. J. on the Admin. R. & Mem. in Supp. [Dkt. #31] ("Pl.'s Mot."); Mem. in Supp. of Pl.'s Mot. [Dkt. # 31] ("Pl.'s Mem."). Defendants filed a combined opposition and cross-motion on August 18, 2015. Defs.' Opp. to Pl.'s Mot. & Cross-Mot. for Summ. J. [Dkt. # 37] ("Defs.' Mot."). Plaintiff filed its reply and cross-opposition on September 8, 2015, Pl.'s Opp. to Defs.' Mot. & Pl.'s Reply to Defs.' Opp. & Mem. in Supp. [Dkt. # 41] ("Pl.'s Reply"), and defendants filed their cross-reply on September 14, 2015. Defs.' Cross-Reply [Dkt. # 47]. Also on September 8, 2015, Big Bus Tours filed its sealed opposition to plaintiff s motion, Def-Intervener's Mem. in Opp. to Pl.'s Mot. [Dkt. #43] ("Intervenor's Opp."), and plaintiff replied to that pleading on September 15, 2015. Pl.'s Reply to Intervener's Opp. [Dkt. # 49]. The Court held a hearing on the motions on February 4, 2016. Min. Entry (Feb. 4, 2016); see also Draft Tr. of Hr'g, Nat'l Mall Tours of Wash., Inc. v. U.S. Dep 't of Interior, No. 15-0529 (D.D.C. argued Feb. 4, 2016) ("Draft Hr'g Tr.").


Summary judgment is appropriate when the pleadings and evidence show that "there is no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). However, in cases involving review of agency action under the APA, Rule 56 does not apply due to the limited role of a court in reviewing the administrative record. Select Specialty Hosp.-Akron, LLC v. Sebelius, 820 F.Supp.2d 13, 21 (D.D.C. 2011). Under the APA, a court must "hold unlawful and set aside agency action, findings, and conclusions" that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, " 5 U.S.C. § 706(2)(A), in excess of statutory authority, id. § 706(2)(C), or "without observance of procedure required by law." Id. § 706(2)(D).

"The court's role in reviewing agency contract decisions is limited to determining whether the agency acted in accord with applicable statutes and regulations and had a rational basis for its decisions." LeBoeuf, Lamb, Greene & MacRae, LLP v. Abraham, 347 F.3d 315, 320 (D.C. Cir. 2003), quoting Delta Data Sys. Corp. v. Webster, 744 F.2d 197, 204 (D.C. Cir. 1984). "As with other agency cases, [the] review is limited to the administrative record, and the agency is entitled to a presumption of regularity." Id. (citations omitted). "[C]ourts will not make contracts for agencies, for the ultimate grant of a contract must be left to the discretion of the agency, 'unless it is clear that, but for the illegal behavior of the agency, the contract would have been awarded to the party asking the court to order the award.'" Id., quoting Delta Data, 744 F.2d at 204. "Consequently, the disappointed bidder seeking to overturn the agency's decision must show either that the agency's decision lacked a rational basis or that the 'procurement procedure involved a clear and prejudicial violation of applicable statutes or regulations.'" Id., quoting Kentron Haw., Ltd. v. Warner, 480F.2d 1166, 1169 (D.C. Cir. 1973).


Plaintiffs complaint consists of four counts, each alleging that the Park Service acted arbitrarily and capriciously or in violation of the law in awarding the contract to Big Bus Tours. In Count I, plaintiff contends that the certifications made by Big Bus Tours in its Offeror's Transmittal Letter concerning "any past criminal conduct or conduct involving fraud by the offeror and any owners of the offeror" were invalidated by the Exponent transaction, and that the Park Service failed to invoke its authority to cancel the Prospectus when it became aware that the certifications were no longer accurate. Compl. ¶¶ 68-81. In Count II, plaintiff alleges that the information Big Bus Tours provided in response to Principal Selection Factor 3 of the Prospectus regarding entities with a controlling interest in the offeror was also invalidated by Exponent's acquisition of an interest in Big Bus Tours Limited, and that this too rendered the award invalid because the Park Service failed to consider the material change in ownership. Id. ¶¶ 83-89. In Count III, plaintiff contends that Big Bus Tours provided inaccurate responses to Principal Selection Factor 4 regarding business history, and therefore, the award of the contract by the Park Service was unlawful. Id. ¶¶ 91-102. And in Count IV, plaintiff alleges that the Park Service acted unreasonably when it determined that the annual gross revenues for the first year of the new contract would not exceed $5 million, the statutory threshold at which the agency was required to submit the contract to Congress for a sixty-day notification period, and that its failure to submit the contract and let the two-month period go by invalidates the award. Id. ¶¶ 104-12.

At the hearing, plaintiffs counsel stated that plaintiff has abandoned the claim in Count I. Draft Hr'g Tr. 33:15-34:4.[6] As for Counts II and III, the Court finds that there was no failure by the Park Service to consider information material to the Prospectus because there was no change in the controlling interest of the offeror - Big Bus Tours. Therefore, the decision to award the contract to Big Bus Tours was not invalid.[7] Further, considering Count IV, the Court concludes that the agency's determination that Congressional notification was not required was reasonable. So, it will deny plaintiffs motion for summary judgment, and it will grant summary judgment in defendants' favor.

I. Exponent's acquisition of a stake in Big Bus Tours Limited did not result in a change in the "controlling interest" in Big Bus Tours.

The thrust of plaintiff s case on summary judgment is that the Park Service's award of the concession contract to Big Bus Tours was invalid because there was a change in the controlling interest in Big Bus Tours, the offeror, and this claimed change rendered the proposal invalid and the offeror ineligible for the award. Counts II and III of the complaint attack the award based on purported inaccuracies in the responses to Principal Selection Factors 3 and 4 in the Big Bus Tours proposal. Compl. ¶¶ 83-102.

Plaintiff argues in its memorandum that the award of the contract to Big Bus Tours was invalid because the identity of any entity which held an ownership or controlling interest in an offeror was material to the evaluation criteria set forth in the Prospectus. Pl.'s Mem. at 19-24. According to plaintiff, there was a change in controlling interest after Big Bus Tours submitted its proposal, and it rendered the proposal inaccurate and invalid ab initio. Id. But the ownership in Big Bus Tours never changed: it was, and remains, a wholly-owned subsidiary of Open Top Sightseeing, which in turn was, and still is, a wholly-owned subsidiary of Big Bus Tours Limited. Compare AR 1059 (Big Bus Tours' December 2014 proposal showing Big Bus Tours' organizational structure), with AR 1846 (Big Bus Tours' March 28, 2015 letter to ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.