US v. Instruments, SA, Inc.

• Decision Date: 13 November 1992
• Docket Number: Civ. A. No. 91-1574-LFO.
• Citation: 807 F. Supp. 811
• Court: U.S. District Court — District of Columbia
• Parties: UNITED STATES of America, Plaintiff, v. INSTRUMENTS, S.A., INC., and Fisons Instruments/VG Instruments, Defendants, Comptroller General of the United States, Intervenor-Defendant.

807 F. Supp. 811

UNITED STATES of America, Plaintiff, v. INSTRUMENTS, S.A., INC., and Fisons Instruments/VG Instruments, Defendants, Comptroller General of the United States, Intervenor-Defendant.

Civ. A. No. 91-1574-LFO.

United States District Court, District of Columbia.

November 13, 1992.

Carter G. Phillips, Rex E. Lee, Michael A. Nemeroff, Peter D. Keisler, Richard D. Klingler, Paul E. Kalb, David L. Lawson, Sidley & Austin, Joan M. Hollenbach, Associate Gen. Counsel, Elizabeth S. Woodruff, Paul G. Thompson, U.S. General Accounting Office, Office of the Gen. Counsel, Washington, DC, for intervenor-defendant.

Michael R. Gottfried, Chester A. Janiak, David P. Shouvlin, Walter M. Foster, Andrew P. Botti, Burns & Levinson, Boston, MA, for Fisons Instruments/VG Instruments.

David O. Bickart, Christopher R. Brewster, Kaye, Scholer, Fierman, Hays & Handler, Washington, DC, for Instruments S.A., Inc.

Stuart M. Gerson, Asst. Atty. Gen., Jay B. Stephens, U.S. Atty., Michael F. Hertz, Joan E. Hartman, Elizabeth A. Cavendish, Attys. Commercial Litigation Branch Civil Div. Dept. of Justice, Washington, DC, for plaintiff.

MEMORANDUM

OBERDORFER, District Judge.

This action is a constitutional challenge to a portion of the protest provisions of the Competition in Contracting Act of 1984 (CICA), 31 U.S.C. §§ 3551-3556. The plaintiff is the United States, represented by the Department of Justice. The defendants are two disappointed bidders on contracts with the Department of Commerce. The Comptroller General of the United States has intervened as a party defendant. See Order of January 10, 1992. The provision at issue is 31 U.S.C. § 3554(c). It provides for the payment of certain bid protest costs when the Comptroller General, an agent of Congress, determines that a disappointed bidder is entitled to such costs. Plaintiff claims that this provision violates separation of powers embodied in the Constitution because the payments would be effected by Executive Branch agencies.

Defendants Instruments, S.A., Inc. (Instruments) and Fisons Instruments/VG Instruments (Fisons) have moved to dismiss for lack of jurisdiction; plaintiff has filed a motion for summary judgment; and Instruments, Fisons and the Comptroller General have filed cross-motions for summary judgment. For the reasons that follow, the action will be dismissed.

I.

In enacting CICA, Congress intended to promote competition in the government's procurement of goods and services. Ameron, Inc. v. United States Army Corps of Engineers, 787 F.2d 875, 879 (3d Cir.1986), cert. dismissed, 488 U.S. 918, 109 S.Ct. 297, 102 L.Ed.2d 264 (1988). Among other things, CICA established a "Procurement Protest System," which allows disappointed bidders to file protests with the Comptroller General. A procurement is stayed while the Comptroller General considers the protest, unless the agency finds that urgent and compelling circumstances require that it go forward immediately. 31 U.S.C. § 3553(c). If the Comptroller General determines that the agency has failed to comply with applicable law, he "recommends" that the agency take certain action, such as resoliciting bids and/or terminating the contract. 31 U.S.C. § 3554(b)(1). In addition, if the Comptroller General determines that the agency's procurement failed to comply with applicable law, he:

may declare an appropriate interested party to be entitled to the costs of —

(A) filing and pursuing the protest, including reasonable attorneys' fees; and

(B) bid and proposal preparation.

31 U.S.C. § 3554(c)(1). The statute goes on to provide that such protest cost awards "shall be paid promptly by the Federal agency concerned out of funds available to or for the use of the Federal agency for the procurement of property and services." 31 U.S.C. § 3554(c)(2). It is this protest cost award provision that is challenged here.

In March 1989, the Department of Commerce requested bid proposals for a chemical beam epitaxy system. Defendants Instruments and Fisons submitted bids, were denied the contract and filed protests with the Comptroller General. In 1990, the Comptroller General declared both companies entitled to protest costs under § 3554(c)(1). Fisons submitted a claim to the Department of Commerce for $21,615.28, and Instruments submitted a claim for $54,622.89. The agency has not paid those claims, nor has it formally denied them.

Plaintiff, relying on such cases as Metropolitan Washington Airports Authority v. Citizens for Abatement of Aircraft Noise, Inc., ___ U.S. ___, 111 S.Ct. 2298, 115 L.Ed.2d 236 (1991), Bowsher v. Synar, 478 U.S. 714, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986), and INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983), argues that § 3554(c) violates the constitutional doctrine of separation of powers because of the authority it purports to grant the Comptroller General to require agencies to pay protest costs. Plaintiff contends that the actions of the Comptroller General, an agent of Congress, under the provision have the characteristics of Executive Branch actions and that the provision thus aggrandizes Congress's power at the expense of the other Branches of the Federal Government. Moreover, plaintiff argues, insofar as the Comptroller General is acting in his capacity as a Legislative Branch official, his actions fail to comply with the Constitution's requirements of bicameralism and presentment. Plaintiff requests a declaration that § 3554(c) violates the Constitution and that the Department of Commerce is under no legal duty to make payment on defendants' claims.

In moving to dismiss on jurisdictional grounds, defendants Instruments and Fisons argue that this action presents no case or controversy and that a decision on the merits of the constitutional question would constitute an advisory opinion. In particular, defendants observe that a regulation — in effect since 1985 and final since 1989 — independently binds Executive agencies to award protest costs when the Comptroller General declares a disappointed bidder entitled to such costs. That regulation, using language similar to § 3554(c), provides:

Award of protest costs. (1) GAO may declare an appropriate interested party to be entitled to the costs of

(i) Filing and pursuing the protest, including reasonable attorneys' fees; and

(ii) Bid and proposal preparation.

(2) Costs awarded under subparagraph (1) of this section shall be paid promptly by the agency out of funds available to or for the use of the agency for the acquisition of supplies or services.

50 Fed.Reg. 25,680, 25,681, codified at 48 C.F.R. § 33.104(g) (1985) (the "1985 regulation"). Since the Executive has obligated itself to abide by the Comptroller General's determinations, the defendants maintain, the present dispute presents no impermissible encroachment on the Executive's authority by the Legislative Branch. The Comptroller General, while joining in the defendants' argument, frames the issue in terms of plaintiff's standing to challenge the constitutionality of § 3554(c). In addition, the Comptroller General argues that prudential considerations call for a denial of declaratory relief.

Plaintiff responds by arguing that the 1985 regulation does not independently bind the Executive because it is merely an "implementing" regulation which restates § 3554(c). In addition, plaintiff contends that the 1985 regulation has no effect in this case because it has been amended. Effective August 5, 1991, the applicable regulation states that protest costs "may be paid by the agency...." 48 C.F.R. § 33.104(h) (1991) (emphasis added) (the "1991 regulation"). Although the 1991 regulation went into effect after the defendants pursued their protests (and, in fact, after this lawsuit was initiated), the regulation itself purports to apply retroactively to "all recommended awards of protest costs ... which have not yet been paid." Id.

II.

Initially there is a question as to whether this district court is the proper forum for entertaining the present action. The Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, is procedural only: it added a remedy to those available in the federal courts but did not extend the courts' jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 879, 94 L.Ed. 1194 (1950); Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1937). When a complaint seeks declaratory relief, therefore, there must be a basis for federal jurisdiction independent of the Declaratory Judgment Act itself. Of course, the general requirement of a federal question appears to be met here, since the complaint challenges a federal statute under the Federal Constitution. But the plaintiff must also raise a federal claim, for the Declaratory Judgment Act does not create a cause of action. Skelly Oil, 339 U.S. at 672, 70 S.Ct. at 879. Plaintiff does not seek damages for some unlawful past conduct or an injunction against an ongoing or imminent practice. In effect, it seeks a declaration of nonliability for its nonpayment of protest costs to the defendants.

In determining the proper forum, it is appropriate to consider where and whether the claim which is the target of plaintiff's preemptive and anticipatory complaint would lie. The mirror image of plaintiff's requested declaratory relief would be an action by the defendants — disappointed bidders — against the United States for payment of protest costs in excess of $10,000. Such an action, which has not been brought by the defendants, would lie not in this Court but in the Claims Court, because the Tucker Act, 28 U.S.C. § 1491, vests exclusive jurisdiction over such claims in the latter forum. See United States v. Hohri, 482 U.S. 64, 66 n. 1, 107 S.Ct. 2246, 2249 n. 1, 96 L.Ed.2d 51 (1987). Moreover, even that Court may not be in any position to resolve the anticipated dispute because the agency has not formally acted on the claims. Nor is it clear whether the Claims...