Nat'l Air Cargo Grp., Inc. v. United States, 16-362C

• Decision Date: 28 April 2016
• Docket Number: No. 16-362C,16-362C
• Parties: NATIONAL AIR CARGO GROUP, INC., Plaintiff, v. UNITED STATES, Defendant, and UNITED AIR LINES, INC., Defendant-Intervenor.
• Court: U.S. Claims Court

NATIONAL AIR CARGO GROUP, INC., Plaintiff, v. UNITED STATES, Defendant,andUNITED AIR LINES, INC., Defendant-Intervenor.

No. 16-362C

United States Court of Federal Claims

April 28, 2016

Bid protest; multiple awards of indefinite-delivery/indefinite-quantity contracts; challenge by one of the awardees to a later award of an additional contract; statutory prerequisites for a bid protest; 28 U.S.C § 1491(b)(1); standing; dispute over applicability of the Competition in Contracting Act to the later award

Milton C. Johns, Fluet, Huber + Hoang, PLLC, Woodbridge, Virginia, for plaintiff.

Aaron E. Woodward, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. for defendant. With him on the briefs were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, Robert E. Kirschman, Director, and Douglas Mickle, Assistant Director, Civil Division, United States Department of Justice, Washington, D.C. Of counsel was Karen L. Tibbals and Peter B. Ries, Acquisition Attorneys, United States Transportation Command, Scott Air Force Base, Illinois, and Lieutenant Colonel Aaron G. Lake, Deputy Chief, Commercial Litigation Field Support Center, United States Air Force, Andrews Air Force Base, Maryland.

David S. Cohen, Cohen Mohr, LLP, Washington, D.C. for defendant-intervenor. With him at the hearing was Daniel J. Strouse, Cohen Mohr, LLP, Washington, D.C.

OPINION AND ORDER

LETTOW, Judge.

The United States Transportation Command ("TRANSCOM" or "government") awarded five indefinite-delivery/indefinite-quantity contracts in June 2015 for multi-modal international shipping of Department of Defense and other government-approved cargo. Plaintiff National Air Cargo Group, Inc. ("National") was one of the awardees. The following month, the government awarded a sixth contract to United Air Lines, Inc. ("United"). National then submitted protests regarding the sixth award to the Government Accountability Office ("GAO") and this court, resulting in TRANSCOM's agreement to take corrective action to reevaluate past performance for all TRANSCOM offerors. Subsequently, TRANSCOM reaffirmed the awards made to each of the six successful offerors. That action prompted this renewed protest.

At this juncture, National alleges that the government's decision to award a contract to United violated terms of the solicitation limiting awardees, as well as applicable statutes and regulations, and was also irrational because United lacks past performance history in multi-modal international shipping. Compl. at 1. The government has filed a motion to dismiss pursuant to Rule 12(b)(1) of the Rules of the Court of Federal Claims ("RCFC"), arguing that National, as an awardee, lacks standing to protest an award of a contract to another offeror in this multiple-award indefinite-delivery/indefinite-quantity procurement. Def.'s Mot. to Dismiss ("Def.'s Mot."), ECF No. 11. National has filed a cross-motion for a preliminary injunction and an application for a temporary restraining order pursuant to RCFC 65. Pl.'s Mot. for Injunctive Relief ("Pl.'s Mot."), ECF No. 12.¹ United was granted leave to defend the award. Order of Mar. 24, 2016, ECF No. 10. A hearing was held on April 13, 2016.²

FACTS AND BACKGROUND³

A. TRANSCOM Requests Proposals for an Indefinite-Quantity Contract for InternationalShipping Services, Selects Five Contractors for Award, and then Later Makes a Sixth Award

On February 12, 2015, the government issued a request for proposals ("RFP") for international multi-modal transportation of government cargo. Compl. ¶ 5.⁴ The RFP providedthat "[t]his is an indefinite-quantity contract for the supplies or services specified, and effective for the period stated." Compl. Ex. 1 (setting out a 90-page excerpt of the RFP) ("RFP") at 9, ECF No. 1-1 to 1-3.⁵ An "indefinite-quantity" contract, also known as an indefinite-delivery/indefinite-quantity ("IDIQ") contract, is a contract by which the government promises to buy a stated minimum and the contractor agrees to sell or provide a stated maximum. 48 C.F.R. ("Federal Acquisition Regulation" or "FAR") § 16.504(a)(1); see also John Cibinic, Jr., et al., Formation of Government Contracts 1386 (4th ed. 2011). Once an IDIQ contract is awarded, the government issues task or delivery orders to the IDIQ contract holder to fulfill its requirements. In some instances, the government awards one IDIQ contract to one contractor. But in many cases, the government awards multiple IDIQ contracts under one solicitation, thereby creating a pool of contractors who compete with each other for task orders. See, e.g., FAR § 16.504(c)(1)(i) (requiring the contracting officer to "give preference" to making multiple awards); FAR § 16.505(b)(1)(i) (providing that each awardee under a multiple-award contract must have an opportunity to compete for any order exceeding $3,500).

The RFP in this instance established that the government would award multiple IDIQ contracts to bidders offering the "best value" to the government, based on four factors: quality of business proposal, technical ability, price, and past performance history. RFP at 87-88. With respect to past performance, the government would give each offeror a "confidence assessment" of either substantial confidence, satisfactory confidence, limited confidence, or no confidence. RFP at 89. If an offeror had "no recent/relevant performance" of record, then the offeror would receive an "unknown confidence" rating, which would be "treated neither favorably nor unfavorably." Id.

Using this evaluation scale, TRANSCOM advised that it would "award approximately four (4) IDIQ contracts," which would give the government "flexibility of choice and service coverage." RFP at 87. The selection of these winners would "initially establish the awardee pool." RFP at 52. This pool of awardees would then compete for task orders issued by TRANSCOM. Id.

Pursuant to FAR § 16.504(a)(1), which requires a minimum task order for each winner, the RFP provided that the government would purchase a minimum of $2,500 of international shipping services from each awardee. RFP at 4. The solicitation set the maximum total dollar amount for all task orders at $296,448,852.21. Id. In essence, each winner thus would compete for up to $296 million in task orders.

The RFP set out a condition bearing on additional awards. In certain circumstances, the RFP permitted the government to "reopen" the competition to add additional contractors to the pool:

1. Recompetition

1.1 The Government will initially establish the awardee pool by competitively awarding multiple-award IDIQ contracts. As future task order requirements within the program ceiling totals materialize, over the life cycle of this program, the Government will compete those requirements amongst all existing IDIQ contract holders to determine if the contract holders can adequately fulfill the needed capability. The Government reserves the right to reopen the competition under this solicitation if there is [a] shortfall in meeting the requirements among the existing IDIQ contract holders or if it is in the Government's best interest to add new contractors to the original pool of IDIQ contract holders. When/if the Government decides to reopen the solicitation, an announcement will be posted via FedBizOps allowing new . . . offerors the opportunity to compete in a full and open competition for an IDIQ contract and task orders to meet the new requirements. Any existing IDIQ contract holder will not re-compete for an IDIQ contract. The competitions will use the same evaluation methodology and documentation (updated to reflect changes in regulatory provisions, requirements and certifications) as the original competition.

RFP at 52. After adding new contractors to the IDIQ pool, the government would continue soliciting task orders from the expanded pool: "Once a new awardee(s) is selected, that awardee(s) will be included in the awardee pool and will compete for future task orders. Subsequent to a reopened competition, initial and new IDIQ awardees can compete for future task orders." Id.

The RFP required offerors to submit proposals by March 16, 2015. RFP at 1. Submissions by this deadline would trigger a 180-day "[p]eriod of acceptance of offers," during which time each offeror "agrees to hold the prices in its offer firm." RFP at 86. In response to the RFP, National submitted a bid. Compl. ¶ 9. On June 11, 2015, the government awarded IDIQ contracts to National and four other bidders. Compl. ¶ 9.⁶ On July 17, 2015, however, the government announced a sixth award, this time to United. Compl. ¶ 10. The five initial awardees had no notice of a possible additional award, nor did TRANSCOM reopen the competition under the RFP's terms. Compl. ¶ 10. National alleges that this action by TRANSCOM violated the Competition in Contracting Act, codified as amended in part in scattered sections of Title 41 of the United States Code, especially 41 U.S.C. §§ 1708, 3701-08. See Compl. at 1. National also asserts that the award was irrational because United has no experience in the type of "multi-modal" shipping services required by the RFP. See Compl. ¶¶ 51-57.

National and the government agree that United will be "a significant source of competition at the task order level," and United does not oppose that characterization. Def.'sOpp'n to Pl.'s Mot. for a Prelim. Inj. ("Def.'s Opp'n") at 9, ECF No. 15; Pl.'s Reply to Def.'s Opp'n ("Pl.'s Reply") at 3, ECF No. 20; Def.-Interv.'s Support of Mot. to Dismiss and Resp. to Mot. for Prelim. Inj. ("Def.-Interv.'s Resp."), ECF No. 13 (not disputing that assertion).⁷

B. National Files a Series of Protests Challenging the Government's Award to United

National filed a bid protest with GAO on July 27, 2015, arguing that TRANSCOM's decision to award six contracts violated the RFP's limitations on awards. Compl. Ex. 3 ("First GAO Protest") at 4-5. National argued the five...