Vero Technical Support Inc v. United States

• Decision Date: 29 September 2010
• Docket Number: No. 10-575C,10-575C
• Parties: VERO TECHNICAL SUPPORT, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Claims Court

VERO TECHNICAL SUPPORT, INC., Plaintiff,
v.
UNITED STATES, Defendant.

No. 10-575C

United States Claims Court.

Filed: September 29, 2010

David F. Barton, The Gardner Law Firm, San Antonio, TX, for the plaintiff.

Arlene P. Groner, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for the defendant. With her were Christopher A. Bowen, Trial Attorney, Steven J. Gillingham, Assistant Director, Jeanne E. Davidson, Director, Commercial Litigation Branch and Tony West, Assistant Attorney General, Civil Division.

ORDER

HORN, J.

This case was brought against the United States by plaintiff, Vero Technical Support, Inc. (Vero), in the United States Court of Federal Claims as a bid protest, according to plaintiff, "in connection with a procurement or a proposed procurement," pursuant to 28 U.S.C. § 1491(b)(1) (2006) (the Tucker Act). The case is before the court on the defendant's motion to dismiss and cross-motions for judgment on the administrative record. Vero's protest arises from a department wide insourcing policy decision made by the United States Department of Defense (DoD) and a Department of the Air Force decision to insource the work for which plaintiff currently has an ongoing contract. Plaintiff's contract, however, is due to end by its own terms on September 30, 2010, with the government having a unilateral option to extend plaintiff's contract for up to six months. Vero alleges that the United States improperly plans to insource the work Vero currently performs for the Air Force, in violation of 10 U.S.C. § 129a (2006) and 10 U.S.C. § 2463 (2006). Plaintiff challenges the DoD's insourcing decision process for using improper data and failing to make a "like comparison" between Vero's costs and the government's own costs and, therefore, defendant's failure to select the low cost provider for the services required. The plaintiff describes the government's decisions as a "procurement decision that permanently removes the scope of work from the competitive realm and violates statutes (10 U.S.C. § 129a) and its [the Air Force] own insourcing procedures...which it has expressly bound itself to." According to the plaintiff, the "Air Force is simply continuing to insource without basis."

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Vero alleges in its complaint before this court that the DoD and Air Force insourcing decisions and the findings and conclusions to support those insourcing decisions were arbitrary and capricious agency actions and an abuse of discretion, or otherwise made not in accordance with law. Plaintiff requests a declaratory judgment to that effect. Vero also requests a temporary restraining order, as well as preliminary and permanent injunctive relief to enjoin and to set aside the DoD and Air Force insourcing decisions. Furthermore, plaintiff requests attorney's fees and expenses.

Currently, Vero provides weather forecasting, weather observation, maintenance and support services at meteorological stations at eleven Army bases and fifteen total sites throughout the United States, pursuant to Contract No. FA4890-10-C-0006 (the contract). Vero was awarded the contract on March 15, 2010. The contract had a phase in period from March 15 through March 31, 2010, plus a base period of six months from April 1, 2010 to September 30, 2010, with no optional CLINs [Contract Line Item Numbers], except for four locations which had a three month base period, plus three one month optional CLINs. Although Vero's work is performed at Army bases, Vero reports to the Air Force, and it is the Air Force which is handling the insourcing of the services Vero has been performing. The Air Force has begun hiring various Vero employees as government employees to facilitate the insourcing at a number of Army bases.

Prior to award of the contract to Vero, the Air Force issued Amendment No. 9 to the Request for Proposals (RFP) FA4890-08-R-0004. Amendment No. 9 was issued following the Air Force's decision to insource the services provided for in the RFP in the future. Accordingly, the period of contract performance was shortened in the RFP, or, as explained in an accompanying memorandum to offerors from the contracting officer, the performance period was altered as a result of "realigning resources to support the in-sourcing initiative." After the issuance of Amendment No. 9, the government reopened discussions and invited offerors to submit revised price proposals. Vero submitted a revised price proposal in response to the shortened period of performance, and ultimately was awarded the contract.

Before filing suit on August 24, 2010 in this court, Vero had filed suit on June 8, 2010 in the United States District Court for the Southern District of Florida against the United States, also naming the DoD, the Air Force, and the Army as defendants. In its complaint in the District Court, as in this court, Vero had asked for declaratory relief and challenged the decisions by the DoD and the Air Force to insource the work Vero is currently performing. In both courts, plaintiff alleged that the defendant's insourcing decision had not been made in accordance with the insourcing procedures required by

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10 U.S.C. § 129a and 10 U.S.C. § 2463, and that the defendant had ignored or violated its own procedures by arriving at the insourcing decision without "like comparison" of the costs of insourcing its own personnel, as compared with those of Vero. In the District Court, however, Vero argued jurisdiction pursuant to the Administrative Procedure Act (APA), 5 U.S.C. §§ 701-706 (2006), specifically section 702, and not pursuant to the Tucker Act, which the plaintiff argues is the basis for jurisdiction in this court. In the District Court, as it also did subsequently in this court, Vero requested a declaratory judgment that the defendant's insourcing decisions, and the agency actions which led to the findings and conclusions to support the insourcing decisions, were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law and requested a temporary restraining order, as well as preliminary and permanent injunctive relief to enjoin the defendant's insourcing decision. In the District Court, as in this court, plaintiff also requested attorney's fees and expenses.

In its complaint filed in the District Court, Vero unequivocally stated its position on jurisdiction, as follows, "the issue is whether Defendants arbitrarily ignored or violated their own procedures (never incorporated into VTS' [Vero's] contract), not whether Defendants violated some contractual provision. This is not a case founded on any contractual provision at all, and is not a 'government contract' case. VTS requests no contractual relief." Plaintiff also stated in its complaint in the District Court, "[t]he CDA [Contract Disputes Act, 41 U.S.C. §§ 601-613 (2006)] does not apply by its very terms. No contractual right guarantees Plaintiff's continued performance; the Court need only determine whether there was a violation of Plaintiff's procedural rights under the APA." Therefore, Vero alleged that "[t]here is no adequate remedy in the Court of Federal Claims." It is evident that plaintiff Vero made a conscious choice that jurisdiction to challenge the defendant's insourcing decisions is based on section 702 of the APA, and that the case should be brought in the United States District Court. The plaintiff could not have stated more clearly that Vero was of the opinion that Tucker Act jurisdiction would be improper.

In response to Vero's complaint in the District Court, the defendant United States filed a motion to dismiss for lack of jurisdiction, claiming that contrary to plaintiff's allegations, the United States Court of Federal Claims has exclusive jurisdiction over Vero's claims under 28 U.S.C. § 1491(b)(1). On August 4, 2010, the District Court Magistrate Judge assigned to the case issued a "Report and Recommendation on Defendant's Motion to Dismiss, as well as on Plaintiff's Applications for Temporary Restraining Order and for Preliminary Injunction." The Magistrate Judge's Report recommended granting the defendant's motion to dismiss for lack of jurisdiction. The Magistrate Judge stated that "[t]here appears to be no dispute that the APA governs the Plaintiff's claim. Rather the dispute concerns which court has jurisdiction to hear the APA claim." The Magistrate Judge agreed with the defendant that the United States Court of Federal Claims was the court with jurisdiction to address Vero's claims. The Magistrate Judge noted, however, that "Plaintiff vigorously denies that its Complaint falls within the scope of [28 U.S.C.] § 1491(b)(1). First it [plaintiff] maintains that the dispute over insourcing is not procurement-related. Insourcing, the Plaintiff reasons, is the opposite of procurement." Although the Magistrate Judge indicated that "[t]he Plaintiff's

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argument is well-taken," the Magistrate Judge reasoned that, "§ 1491(b)(1)'s language is broad enough to encompass this situation." The Magistrate Judge also indicated that "[t]here was a time when federal district courts had APA jurisdiction to hear contract award challenges and violations of government contract law. The Administrative Dispute Resolution Act ('ADRA') [the Administrative Dispute Resolution Act of 1996, Pub. L. No. 104-320, 110 Stat. 3870], ended this shared jurisdictional arrangement...." The Magistrate Judge concluded that the Court of Federal Claims "enjoys exclusive jurisdiction" and that the defendant's motion to dismiss the District Court action should be granted. On August 17, 2010, in a brief Order, the District Court Judge "affirmed, adopted and ratified" the Magistrate Judge's Report in its entirety and granted the defendant's motion to dismiss for lack of subject matter jurisdiction.

Thereafter, Vero filed suit in the Court of Federal Claims. In the complaint filed in this court, Vero reaffirmed its belief that...